You do not have to include the FEMA
assistance which you received in your federal tax return - FEMA assistance is not taxable
income, and does not affect benefits from any other federal program.
You would
need to check your state's rules in respect of the taxability of FEMA
assistance, but it would likely be not taxable for state tax purposes as well.
FEMA
grants for rent, essential home repairs, personal property losses and other
serious disaster-related needs not covered by insurance do not count as income.
For
more information, please see the following IRS webpage with FAQs for Disaster
Victims about FEMA mitigation payments:
https://www.irs.gov/businesses/small-businesses-self-employed/faqs-for-disaster-victims-mitigation-p....
