Untaxed Income Definition? (Not Seeking Tax Advice)

In My Humble Opinion
1

My daughter is applying for a scholarship (based on need). They ask for various dollar amounts from our most recent Federal income tax filing. Most of the questions are straight-forward, but I cannot picture one requested value: “Yearly untaxed income/ benefits”. This is described as: “Untaxed Income and Benefits - include any other income or benefits not included in the adjusted gross income figure. Do not include untaxed contributions to retirement plans.”

Can you give me an example of income not already accounted for in the adjusted gross income? Also, regarding benefits…I do not follow what they mean. Do they mean what my employer has paid on my behalf for health care? And/or, what my employer contributed to my HSA? In general, I cannot picture income that is not already included in the adjusted gross income figure. (Please understand I rely heavily on Turbo Tax to guide me along, and most of this is a lot of mumbo-jumbo to me.)

Thanks in advance!

2

Usually that covers income from odd off-the-book type jobs. Baby-sitting, dog-walking, and house cleaning immediately come to mind.

ETA: I honestly wouldn’t worry about reporting it unless it’s actually a pretty good amount of money and there’s a chance they might find out somehow.

3

Child support is the big one. Otherwise it’s difficult to ascertain what they mean without examples.

4

Insurance payouts.

5

Municipal bond interest, which isn’t taxable.

6

Structured settlements.

7

Ah! I believe I see what you mean. Thanks for clarifying!

8

States tax them if they’re for another state, of course.

Alimony is taxable in 2017 but not in the future (similarly, paying alimony is deductible now but not next year).

9

Monetary gifts is another one. I don’t know what’s the limit in different US jurisdictions, but most places have a limit on monetary gifts below which they are non-taxable.

10

But gifts are taxable to the giver in those cases, never to the recipient.

11

Like everything legal, that would vary by location. In Spain what you describe would be considered double taxation (the giver already paid any applicable taxes when he got the money) and have the lawyers howling for blood. They’d probably get it, too.

12

nm

13

I’m pretty sure the intent of the question was not to enquire whether you failed to declare any taxable income because you thought you could get away with it!

14

From FAFSA (which is the definition they are likely using, being a needs based scholarship):

The response indicates the total amount of any other untaxed income and benefits that the student’s parents received in 2015, such as workers’ compensation, disability benefits, Black Lung Benefits, Refugee Assistance, untaxed portions of Railroad Retirement Benefits, or wages not subject to taxation by any government. Also include the untaxed portions of health savings accounts from IRS Form 1040-line 25.

The following benefits should not be included: extended foster care benefits, student financial aid, earned income credit, child tax credit, welfare payments, untaxed Social Security benefits, Workforce Innovation and Opportunity Act educational benefits, on-base military housing or military housing allowance, combat pay, benefits from flexible spending arrangements, foreign income exclusion, and credit for federal tax on special fuels.