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Last Updated: 12/28/2016

Household Income for Income Tax Credits

Your “household income” affects eligibility and how much you can receive for some tax credits. It generally includes your Minnesota adjusted gross income (AGI)–plus nontaxable income.

You calculate household income on lines 1 through 5 of the forms used to claim the following Minnesota credits and refunds:

The list below outlines what you must include in household income, arranged by line number on these forms. However, the list may not be complete, so be sure to include any other nontaxable income you receive.

Line 1 — Federal Adjusted Gross Income (FAGI)

  • Start with the FAGI from your federal return. 
  • If you have a negative FAGI (less than zero), enter the negative amount.
  • If you didn’t file a federal return, you should still refer to federal Form 1040 and instructions to determine what your FAGI would have been.

Line 2 — Nontaxable Social Security/Railroad Retirement Board Benefits

Include Social Security and “Tier 1” Railroad Retirement Board benefits, except for any amounts that were part of your AGI. These include:
  • Medicare deductions, including those for payment of Medicare premiums
  • Social Security benefits listed in box 5 of Form 1099-SSA, “Net Benefits.” (Use the entire amount in box 5 if no Social Security benefits are included in AGI.)
  • Retirement Survivors Disability Insurance (RSDI). RSDI is considered Social Security Disability (SSD or SSDI) and nontaxable amounts must be included in household income.

Note: Don’t include Social Security benefits you received for a dependent.

Line 3 — Payments to an IRA, Keogh, SEP or SIMPLE Plan

Include contributions you made to any of these retirement plans if you deducted the payments from AGI. If you have an employer deduct SEP or SIMPLE contributions from your pay, include them on line 5.

Line 4 — Total Payments from Government Programs

Include any nontaxable program payments you received, such as:

  • Minnesota Family Investment Program (MFIP)
  • Minnesota Supplemental Aid (MSA)
  • Supplemental Security Income (SSI)
  • General Assistance (GA)
  • Group Residential Housing (GRH)
  • Diversionary Work Program (DWP)
  • Pay-for-Performance Success Payments under the federal Home Affordable Modification Program (HAMP)
  • Refugee cash assistance
  • Emergency assistance

If you receive program payments, your county usually sends a statement showing your cash benefits for the year.

Note: Don’t include the following benefits:

  • Noncash benefits from government agencies, such as: food or food stamps, clothing, medical supplies, fuel assistance, and child care assistance or payments made to child care providers.
  • Medicaid or General Assistance Medical Care (GAMC)

Repayment of Program Benefits

If you repaid program benefits during the year, you can subtract the amount of those repayments from the amount you report on line 4. However, you can’t subtract any repayments you made in other years.

Line 5 — Additional Nontaxable Income

Include any other sources of income that weren’t taxed on your federal return. Common examples include:

  • Disability benefits
  • Contributions to pre-tax employee benefit
  • Contributions to deferred compensation plans
  • Interest and mutual fund dividends
  • Nontaxable scholarships, fellowships, and grants for education
  • Pension and annuity payments
  • Sick pay and/or disability benefits
  • Strike benefits
  • Veterans benefits.
  • Workers’ Compensation

The above list is only a general guide.