Government Benefits

Individuals may receive payments from the federal and/or state government for a variety of reasons. In many cases these benefits may be received entirely tax free.

Most government payments can be received tax free; they are excludable without regard to their amount or your income.

If you must repay Social Security benefits in excess of annual benefits received, you may deduct the excess amounts as a miscellaneous itemized deduction to the extent total itemized deductions exceed 2 percent of adjusted gross income.