Is this reimbursement really taxable income?

The homeowners should have gotten their own air conditioners first, and been reimbursed for them afterwards. In that case it wouldn't be income - it would have been a reimbursement. But taking the money (or air conditioners) first is taxable income because the program doesn't specify that it's reimbursement for anything that would make it non- taxable.

I guess another option would have been to say the "incident" caused physical personal injuries (however small) and this was to compensate them for the injuries. That would have been tax free.

But being given money or air conditioners due to an "inconvenience" is very likely taxable.

The format of the program was for the homeowners to purchase air conditioner units themselves, present receipts and and apply for reimbursement afterwards. From the program description:

"Option 1. Air conditioner unit(s) LA Sanitation & Environment will reimburse residential households for air conditioning units (defined as air conditioners, fans, air purifiers, air filters, and installation) if they don?t already have them. There is a $600 limit per household for homes 1000 square feet or smaller and a $1200 limit per household for homes above 1000 square feet. Receipts will be required within 14 days of purchase. This offer is valid July 12, 2021 through 11:59pm September 23, 20021 unless otherwise extended in writing by the City of Los Angeles."

I don't know if that affects the analysis.

Why wouldn't this be considered a gift? After all, the homeowner is doing nothing in return to "earn" the $1200. I always considered the difference between a gift and income is that a gift is something given to someone with no expectation of getting anything in return. On the other hand, income is paid to reward some kind of effort or action by the recipient. In this case, it seems the homeowner does nothing to "earn" the $1200 and the provider of the money is seemingly getting nothing in return. So why is this not a gift?

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Generally only humans are allowed to make gifts from a tax standpoint. And it's only a gift if it comes from disinterested sense of generosity. These payments were for a specific purpose, not out of pure generosity. Income tax is imposed in any accession to wealth that is not subject to an exception. It has nothing to do with working for it.

Just following up on this thread because I cannot seem to get a decent answer. How did y'all handle this on your taxes? I don't understand why I am having to pay 22% in taxes on a reimbursment.

Please help!