The good news is that your payment will not be taxed. Guidance on the IRS website reads as follows:
The payment is not included in your gross income. Therefore, you will not include the Payment in your taxable income on your Federal income tax return or pay income tax on your Payment. It will not reduce your refund or increase the amount you owe when you file your 2020 Federal income tax return.
A Payment also will not affect your income for purposes of determining eligibility for federal government assistance or benefit programs.
For more information, see the IRS web page here:
Or call Heaton’s Income Tax & Accounting at 828-675-9396.
