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Additional Nontaxable income

If you had people living with you other than a spouse or renter, include their income for the time they lived with you during the year.

Other common examples include:

• acquisition or abandonment of property gain, reported on 1099-A, not included in your federal income

• adoption assistance - subsidy payments as well as employer paid expenses

• canceled, discharged, or forgiven debt that was not included in your federal adjusted gross income, excluding any amount on line 4 of Schedule M1NC 

• Community Access for Disability Inclusion Waivers

• contributions to deferred compensation plans such as 401(k), 403(b), 457 deferred compensation, or SIMPLE/SEP plan

• contributions to dependent care accounts and medical expense accounts

• disability benefits

• distributions from a ROTH or traditional IRA not included on line 1, including distributions made to charity

• employer paid education expenses

• federal adjustments to income for contributions to IRA, Keogh, and SIMPLE/SEP plans

• federally nontaxed interest and mutual fund dividends

• foreign earned income exclusion

• foster care payments, including adult foster care

• gain on the sale of your home excluded from your federal income

• G.I. Bill funding, including scholarships

• housing allowance for military or clergy

• income excluded by tax treaty

• long-term care benefits received

•lump-sum distribution reported on line 1 of Schedule M1LS

• Medicaid Home & Community-Based Services Waiver program payments

• Medicare Part B Premiums

• nontaxable Compensated Work Therapy (CWT) payments

• nontaxable employee transit and parking expenses

• nontaxable military earned income, such as combat zone pay

• nontaxable pension and annuity payments, including disability payments

• nontaxable personal injury or other settlement income

• nontaxable scholarships, fellowships, grants for education, including those from foreign sources, and tuition waivers or reductions

• ParentPay payments

• Public Safety Officer medical insurance exclusion

• reduction in rent for caretaking responsibilities, include the amount shown on your CRP

• sick pay

• strike benefits

• VEBA contributions made by the employee

• veterans’ benefits including Special Monthly Compensation (SMC)

• worker’s compensation benefits


Also include the following losses and deductions to the extent they reduced federal adjusted gross income:

• capital loss carryforward

• educator expenses and tuition and fees deductions

• health savings account, domestic production activities, and the Archer MSA deductions

• net operating loss carryforward/carryback

• passive activity losses in current year in excess of current year passive activity income, including rental losses, even if actively involved in real estate

• prior year passive activity loss carryforward claimed in 2018 for federal purposes

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