419-5 Earned Income Exclusions
Effective Date:
November 1, 2021
No Previous Policy
General
Information
Some earned income is not counted
to determine eligibility for CHIP. The following policy explains how to
treat certain types of income.
1. Earned
Income Tax Credit (EITC) payments. Do
not count
EITC received as part of the individual's income tax refund (521-32).
2. Workforce
Innovation and Opportunity Act (WIOA). Do not count income paid by
programs funded under WIOA if it is not paid as wages. Anything paid as
wages is counted as earned income.
o Payments
for day care or social services are not countable income.
3. Hostile
Fire Pay.
o For CHIP,
exclude the full amount of the person's military pay from taxable
income an individual earns while on active military duty serving in a
combat zone. This amount should not be shown in box 1 on the person's
W-2 form. Do not count this type of income in the MAGI income calculation.
4. Individual
Development Accounts. Deduct
any earnings a individual deposits into an Individual Development Account
(IDA) from countable income. Matching funds contributed to an IDA
do not count as income. Exclude interest earned on the individual’s
own contributions or matching funds from countable income.
5. Earned
Income Exclusion for Temporary Census Takers.
Every
ten years (i.e. 2020, 2030) the Census Bureau hires temporary employees
to conduct the National Census. In many cases, persons hired as
temporary census workers begin their employment in the preceding year.
o For CHIP,
these earnings would be reported as taxable earnings and therefore are
counted as income. Such employment is temporary; treat is as seasonal
income as determined in section 435-2.
6. Sale
of Native American or Alaska Native Significant Items. Exclude
payments resulting from the sale of items that have unique religious,
spiritual, traditional or cultural significance to Native Americans or
Alaska Natives. This exclusion applies to:
a. Individuals
who make and sell the above mentioned items as a means of self-employment.
b. Individuals
who own and sell the items but do not make them.
c. The exclusion
does not apply to the wages of employees of retail establishments
who sell significant Native American items.