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He has received this income since he retired 20 years ago, Is this considered an interest or dividend income or like Social Security? He has lived with my wife and I for 2 years, he still owns his home in another state but my mom still lives there.

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Yes, it is taxable. If he receives a statement such as a 1099 from the Insurance Company, or whoever holds the annuity, you can be sure that the IRS has the exact same statement. Enter the amounts on Lines 16 A and 16 B and complete the facepage of the 1040, 1040A or 1040 EZ, whichever he prefers. Add to all the other income that he receives, and you'll get the AGI or formerly called the MAGI.
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If you are talking Medicaid or other public assistance - it is most definitely counted as income.
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What has he gotten for taxes? w2, 1099, other type of taxable reporting? All income will send out a form with the taxable reported amount this time of the year.
You know if he has two domicles, you need to get whatever mail that affects him directly sent to your address where he lives.

Are they still filing jointly? If bring separate is the plan from here on out, you may want to do some long view planning with elder law on all this. Dad may be fine right now but IF in the future the level of care needed increases and he needs to go into a facility & needs to apply for Medicaid there will be a problem with the in another state property. Medicaid is a joint federal & state program but administered by each state uniquely. States view property in other states as non exempt assets for Medicaid. It's going to be totally sticky to deal with.

Was he older civil service or other federal or quasi federal employee? Those sometimes read as an " annuity" but actually they are retirement income & not what most think of as an "annuity" now (as current thought of annuity is an insurance product you put funds into as an investment)
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I would say that if this is his "retirement" annuity from where he worked as his job (in other words IF he is NOT getting any other type of retirement check) than I would say yes it is income. Now it would depend on if this is from a "retirement fund like a 401K or Roth IRA"............I would check with either IRS or a financial advisor. good luck
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Why do you ask? It all depends on how the IRS views this annuity income. Check with the IRS.
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The pension or annuity payments that you receive are fully taxable if you have no investment in the contract due to any of the following situations:
•You did not contribute anything or are not considered to have contributed anything for your pension or annuity
•Your employer did not withhold contributions from your salary, or
•You received all of your contributions (your investment in the contract) tax free in prior years
See IRS pub 575.
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