# UK Government Grants taxable in US?



## GW48 (Feb 20, 2021)

Hello all,
I am a US expat living in the UK. I received both the US stimulus checks as well as money from the UK Self-Employment Income Support Scheme. Now I need to file my tax returns, first in the US and then in the UK. I know that the US stimulus checks are not taxable in the UK, because they are not income related. What about the other way round: are the UK payments taxable in the US? If so, which type of income is that?
Thanks a lot!


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## Bevdeforges (Nov 16, 2007)

I would assume that the UK payments are "public benefits" and as such are not considered taxable income. Just leave them off your US tax return.


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## GW48 (Feb 20, 2021)

Bevdeforges said:


> I would assume that the UK payments are "public benefits" and as such are not considered taxable income. Just leave them off your US tax return.


Thanks, I am indeed tempted to do that, also because I cannot find any type of income in the 1040 or the schedules where it would fit...


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## Bevdeforges (Nov 16, 2007)

If you want justification for leaving it out in "official form" take a look at IRS Publication 525 the section on Welfare and Other Public Assistance Benefits. The section in the publication starts out:


> Don’t include in your income governmental benefit payments from a public welfare fund based upon need, such as payments due to blindness. Payments from a state fund for the victims of crime shouldn't be included in the victims' incomes if they're in the nature of welfare payments. Don’t deduct medical expenses that are reimbursed by such a fund. You must include in your income any welfare payments that are compensation for services or that are obtained fraudulently.


There is also information in that sections on Disaster Relief Grants and Disaster Relief Payments that seems to apply.


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## GW48 (Feb 20, 2021)

Bevdeforges said:


> If you want justification for leaving it out in "official form" take a look at IRS Publication 525 the section on Welfare and Other Public Assistance Benefits. The section in the publication starts out:
> 
> There is also information in that sections on Disaster Relief Grants and Disaster Relief Payments that seems to apply.


I had found that, but the UK payments are not based on need, but income in previous years. And the Disaster Relief Grants are tied to the declaration of a specific disaster and income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation are NOT covered. Argh.


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## Bevdeforges (Nov 16, 2007)

I wouldn't worry about it all that much. The US government doesn't get information from foreign governments about "government payments" of any sort. The premier example of this is unemployment compensation - the IRS literature is littered with specific statements that US State and Federal unemployment payments are fully taxable as ordinary income. However, I've seen any number of tax experts assert that foreign unemployment payments are NOT considered income and are not reportable on US income tax forms. Has something to do with how US unemployment is calculated and how the premiums on the insurance itself are paid (I think). 

Anyhow, just take the position that the money is a form of "welfare benefit" and leave it out. Chances are you'll never hear of it again.


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