No, forms of welfare are not taxable and generally do not affect your return. If there is a credit that needs nontaxable income such as this to be entered, you will be asked for that input when you are working on that credit. Other than a very few specific credits or deductions in the federal or state, no part of your return uses nontaxable income and, if needed to calculate a credit or deduction, it only affects that one credit.
In the Federal, only the sales tax deduction asks for it, and you only take that deduction if you are itemizing expenses and have enough itemized expenses, in total to exceed your standard deduction.
