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Tax Announcements


IRS Offers Tips on Items Excluded from Income
(Tax Tip 2010-25)

The IRS has provided a tax tip to reacquaint taxpayers with situations where certain types of income are partially taxed or not taxed at all.  The IRS identified common examples of items that are not included in income, such as:

  • adoption expense reimbursements for qualifying expenses,
  • child support payments,
  • gifts, bequests and inheritances,
  • workers' compensation benefits,
  • meals and lodging for the employer's convenience,
  • compensatory damages awarded for physical injury or physical sickness,
  • welfare benefits, and
  • cash rebates from a dealer or manufacturer.

Additionally, the IRS pointed out several items that may or may not be included in income depending on the circumstances, such as:

  • life insurance proceeds,
  • scholarship or fellowship grant amounts, and
  • noncash income.

The IRS reminded taxpayers that all other items, including income such as wages, salaries and tips, must be included in income unless specifically excluded by law.

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Beason & Nalley, Inc.
101 Monroe Street
Huntsville, AL 35801
T: 256.533.1720
Toll Free: 1.800.416.1946


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