General Welfare is not Taxable

If a payment is made for the promotion of the general welfare or as a disaster relief payment, it may be excludable from income for federal tax purposes under the General Welfare Doctrine or as a Qualified Disaster Relief Payment.

The IRS has reviewed the types of payments made by various states in 2022 that may fall in these categories, and determined if a taxpayer does not include the amount of one of these payments in its 2022 income for federal income tax purposes, the IRS will not challenge the treatment of the 2022 payment as excludable for income on an original or amended return.

www.irs.gov

My recommendation is to add it on Sch 1 of form 1040 as “other income”, then back it out of the return by including it in “Adjustments” as an “other adjustment”