25 U.S.C. § 1407 — Tax exemption; resources exemption limitation

None of the following is subject to federal or State income tax: (1) money distributed per capita or held in trust under a plan approved under this chapter; (2) money that on January 12, 1983, was to be distributed per capita or held in trust under a congressional plan approved before that date; (3) money distributed under a plan Congress approved after December 31, 1981, but before January 12, 1983, and purchases made with that money; or (4) money paid by Minnesota to the Bois Forte Band of Chippewa Indians or the Grand Portage Band of Lake Superior Chippewa Indians, or both, under the Bands’ agreements voluntarily restricting tribal hunting and fishing rights in territory ceded under the September 30, 1854 Treaty. This includes interest earned while the money is held in a minor’s trust and all interest and investment income earned while it is held in trust.

That money, its availability, and the listed interest and income cannot be treated as income or resources, or otherwise used to deny or reduce financial assistance or other benefits a household or member would otherwise receive under the Social Security Act. The same rule applies to any federal or federally assisted program, except that per-capita shares above $2,000 are not covered by the exemption.