Taxable income includes: a. child support
b. sick pay c. welfare payments d workers compensation payments
To determine which of the options are included in taxable income, we need to understand how taxable income is determined. Taxable income is calculated by subtracting eligible deductions and exemptions from your total income. Here's a breakdown of what is considered taxable income:
a. Child support: Child support payments received are typically not considered taxable income. They are intended to be used for the support and care of the child, so they are not taxed.
b. Sick pay: Sick pay is generally treated as taxable income. If you receive sick pay from an employer or an insurance company, it is subject to federal income tax, as well as any applicable state and local taxes.
c. Welfare payments: Welfare payments, also known as public assistance or government assistance, are usually not considered taxable income. These payments are designed to provide financial support to individuals or families in need, and they are typically not taxed.
d. Workers compensation payments: Workers compensation payments, which are benefits paid to employees who suffer work-related injuries or illnesses, are generally not considered taxable income. These payments aim to compensate for lost wages or medical expenses and are usually exempt from federal income tax, as well as most state income taxes.
In summary, child support and welfare payments are typically not included in taxable income, while sick pay and worker's compensation payments may be subject to taxation. However, it's important to consult with a tax professional or refer to the tax laws in your specific country or state to get accurate and up-to-date information on how these payments are treated for tax purposes.