Various forms of state aid are not taxable income.
However, it may affect your ability to claim head of household status. If you are single and care for a qualifying dependent, head of household can save money compared to filing as single. But to file as head of household, you have to pay more than half the cost of maintaining your home (rent, food, utilities, etc.) If part of the rent is covered by section 8, you have to account for that in determining whether or not you paid more than half your costs.
