Taxing Definitions

General Welfare Doctrine

Thanks for sharing!
1 minute read
bundle of moneyImage source:

Under the broad wording of the US Internal Revenue code section 61, income you receive from almost any source is taxable, unless specifically excluded. Yet some payments received from the government can escape taxation under a narrow set of circumstances not found in the law. Known as the general welfare exclusion, this doctrine excludes certain government benefits from gross income.

The exclusion applies to payments from a welfare fund of a local, state or federal government. The payment must not be compensation for services, and must be based on need.

Qualifying payments include payments to the blind (Revenue Ruling 57-102), awards to crime victims (Revenue Ruling 74-74), replacement housing payments to aid displaced individuals and families (Revenue Ruling 74-205), assistance payments for lower income families to acquire homes (Revenue Ruling 75-271), and grants to those who are unable to meet necessary expenses or serious needs as a result of a major disaster (Revenue Ruling 76-144).


Other posts you might enjoy

Definition – A whale of a breach   Image source: Sho Hatakeyama on Unsplash Once more into the breach… The security breach of an Equifax online dispute portal from May to July 2017 was a whopper. According to a report published by the US Government Accountability Office in August 2018, records containing personally iden...
Definition — Collecting the debt   Image source: Kody Gautier on Unsplash   Have you heard about the guy who walked into an accounts receivable department to pay a compliment? The old joke may be a possibility for the private debt collection agencies hired by the government to collect delinquent tax debts. A cus...
Definition — Losing the deduction   Image source: Dawid Zawiła on Unsplash   One casualty of the December 2017 federal tax law was the personal casualty and theft loss deduction (section 165 of the internal revenue code). With a few exceptions, as of January 1, 2018, nonbusiness losses from sudden, unexpected, or...
Definition — Stirring up the salt   Image source:     Are you watching your sodium levels by limiting your salt intake? The IRS says the time has come to limit the SALT on your tax return too—including the SALT you may be treating as charitable deductions under programs run by your state. ...
Tagged , ,