General Welfare Exclusion Act
In 2014, a law called the Tribal General Welfare Exclusion Act introduced a new rule (IRC Section 139E) Section 139E that exempts certain payments from Indian tribal government benefit programs from federal Income Taxes. In 2024, the IRS issued proposed regulations for this act.
These programs aim to help tribal members. However, this rule's impact on government benefits can vary depending on the program.
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People who receive benefits from these tribal programs don't have to pay federal Income Taxes on them. But, for government benefits like Medicaid and Supplemental Security Income (SSI), these payments could affect whether you can get them and how much you receive if the tribal program doesn't use a "needs-based" rule.
Even though tribal funds are not taxed as income, they can still affect how specific federal programs calculate child support and Medicaid.
The Social Security Administration (SSA) has a helpful guide that explains how the Tribal General Welfare Exclusion Act affects different benefit programs. Please see the federal SSA handout about Tribal General Welfare Exclusion Act programs.
For a better understanding, the following links provide helpful details about Medicaid and Supplemental Security Income (SSI).
A statement from Representative Nunes (floor statement) gives us important background and reasons for making this law, explaining the motivations and goals behind the change.
A legal opinion from 2015 (SSI opinion) about Supplemental Security Income (SSI) can provide a legal point of view and an example for understanding and using the Tribal General Welfare Exclusion Act. The ongoing discussions about this law help us understand how it works in specific situations.