You may be asked if your household income will be less than a certain amount this year. Your total household income includes all the money that the people in the household earn for the whole year, all added together. When answering this question, make your best estimate so you qualify for the right amount of savings. Be sure to include all of these types of income:
- Money from a job, including tips: If your pay stub lists “federal taxable wages,” use that. If not, use “gross income” and subtract the amounts your employer takes out of your pay for child care, health insurance, and retirement plans.
- Self-employment income: Include “new self-employment income” you expect — what you’ll make from your business minus business expenses. You’ll be asked to describe the type of work you do. If you have farming or fishing income, enter it as either “farming or fishing” income or “self-employment,” but not both.
- Unemployment compensation
- Social Security: Include both taxable and non-taxable Social Security income. Enter the full amount before any deductions.
- Social Security Disability Income (SSDI): Be sure to include SSDI. However, you shouldn’t include Supplemental Security Income (SSI).
- Retirement or pension income: Include most IRA and 401K withdrawals. Don’t include qualified distributions from a designated Roth account as income.
- Investment income: Include expected interest and dividends earned on investments, including tax-exempt interest.
- Also include income from alimony, capital gains, net rental and royalty income, and excluded (untaxed) foreign income.
Note: Only include alimony if your divorce or separation was finalized before January 1, 2019.
Don’t include income from child support, gifts, SSI, veterans’ disability payments, Worker’s Compensation, proceeds from loans (like student loans, home equity loans, or bank loans).
If your income or household members change during the year, be sure to update this information.