Which type of income is exempt from federal taxes?

Inheritances are considered exempt from federal taxes under current tax law. When an individual inherits property or money, they generally do not owe federal income tax on the value of what they receive. This exemption exists regardless of the amount, meaning that individuals can inherit significant wealth without incurring a federal tax liability on that inheritance.

In contrast, jury duty pay is generally taxable as income, just like wages earned from a job, and thus is subject to federal taxation. IRA distributions can also be taxable depending on the type of IRA and the individual's age when withdrawing the funds, with certain exceptions. Child support, while it is not taxable to the recipient, is not classified as exempt income since the paying spouse cannot deduct it from their taxable income, but the recipient does not include it in their income.

Therefore, inheritances stand out as the only type of income listed that is completely exempt from federal taxes, which is a significant distinction in the realm of taxation.