Economic stimulus payment. Any economic stimulus payment you received is not taxable. If your payment was directly deposited to a tax-favored account, such as an IRA, and you withdraw the payment by the due date (including extensions) of your 2008 tax return, the amount withdrawn will not be taxed and no additional tax or penalty will apply.

Retirement plans. Your employer, under a qualified automatic contribution arrangement, can treat you as having elected to have part of your compensation contributed (elective deferral) to a section 401(k) plan, unless you elect out of that arrangement.

Exclusion of income for volunteer firefighters and emergency medical responders. If you are a volunteer firefighter or emergency medical responder, you may be able to exclude from gross income certain rebates or reductions of state or local property or income taxes and up to $30 per month provided by a state or local government. For more information, see Volunteer firefighters and emergency medical responders under Volunteers.

Retroactive VA determination. If you receive this type of determination, the period during which you can file a claim for refund has been extended until the end of the 1-year period beginning on the date of the determination. See the discussion under Disability Pensions.

Qualified military benefit. Any bonus payment by a state or political subdivision to an individual because of service in a combat zone is a qualified military benefit and is excluded from income. See Military.

Casualty loss caused by Hurricane Katrina, Rita, or Wilma. If you claimed a deduction in any tax year for a casualty loss to your home due to Hurricane Katrina, Rita, or Wilma and in a later tax year you receive a grant as reimbursement for that loss, you can report the grant as income in the year you receive it or you can choose to file an amended tax return for the year you claimed the deduction. See Recoveries.

Disaster relief provision. The Heartland Disaster Tax Relief Act of 2008 provides tax relief to persons affected by the severe storms, tornadoes, or flooding occurring in a Midwestern disaster area. Some of the provisions are covered in this publication. For information on other provisions, see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas.

Qualified settlement income. 

If you receive qualified settlement income as a qualified taxpayer, report it on Form 1040, line 21, or Form 1040NR, line 21. Generally, this is interest and punitive damage awards received in connection with the civil action In re Exxon Valdez. You may be able to reduce the amount you report. See Exxon Valdez settlement income under Other Income.

Differential wage payments. Payments made after 2008 by an employer to an individual for any period during which the individual is an active duty member of the uniformed services are treated as wages.

Transportation fringe benefit to bicycle commuters. The qualified employer transportation fringe benefit is expanded to include any qualified bicycle commuting reimbursement made after 2008.

Nonqualified deferred compensation plans of nonqualified entities. Generally, for services performed after 2008, any compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity is included in gross income when there is no substantial risk of forfeiture of the rights to such compensation. For this purpose, a nonqualified entity is:

Terrorist attacks. You can exclude from income certain disaster assistance, disability, and death payments received as a result of a terrorist or military action. For more information, see Publication 3920, Tax Relief for Victims of Terrorist Attacks.

Astronauts. You also can exclude death payments for astronauts dying in the line of duty after 2002.

Foreign income. If you are a U.S. citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U.S. law. This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. For details, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Disaster mitigation payments. You can exclude from income grants you use to mitigate (reduce the severity of) potential damage from future natural disasters that are paid to you through state and local governments. For more information, see Disaster mitigation payments under Welfare and Other Public Assistance Benefits.

Nonqualified deferred compensation plans. Generally, all amounts deferred under a nonqualified deferred compensation plan for all tax years are included in gross income for the current year, unless certain requirements are met. See Nonqualified deferred compensation plans under Employee Compensation.

Health Savings Account (HSA). You can fund your HSA with a one-time direct transfer from your individual retirement plan, health reimbursement account, or health flexible spending account and exclude the amount of the transfer from income. However, you must include the amount transferred in your income, as well as pay a 10% additional tax, if you do not remain an eligible individual for at least 12 months after the month of the transfer. See Accident or Health Plan under Fringe Benefits.

Qualified joint venture. A qualified joint venture conducted by you and your spouse may not be treated as a partnership if you file a joint return for the tax year. See Partnership Income.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that otherwise would be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

You can receive income in the form of money, property, or services. This publication discusses many kinds of income and explains whether they are taxable or nontaxable. It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties. It also includes information on disability pensions, life insurance proceeds, and welfare and other public assistance benefits. Check the index for the location of a specific subject.

Generally, an amount included in your income is taxable unless it is specifically exempted by law. Income that is taxable must be reported on your return and is subject to tax. Income that is nontaxable may have to be shown on your tax return but is not taxable.