DHHS - CHIP Policy Manual
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OBSOLETE POLICY

CHIP MANUAL

 

410-8  Earned Income Exclusions

Effective: September 1, 2010

Previous Policy

 

  1. Bona Fide Work Expense

Do not count reimbursements from an employer of bona fide work expenses.  A bona fide work expense is an expense that has been verified by the employer as being necessary for employment.

  1. Earned income received by a child who is not the head of household.  See section 401-3 for more information.

  1. Census Income

Do not count census income.  Every ten years (i.e. 2000, 2010, 2020) the Census Bureau hires temporary employees to conduct the National Census.  In many cases, the persons hired as temporary census workers begin their employment in the preceding year.

  1. Making Work Pay Tax Credit

Exempt this tax credit from earned income received in 2010. Do not exempt this credit from earnings received after December 31, 2010.  Individuals' tax refunds may include an amount for the Making Work Pay credit for 2009.  Do not count that credit as income when received as part of a tax refund.

  1. Exempt $33.33 from the individual’s monthly gross income before counting their earned income to determine eligibility.

  2. Exempt $33.33 from the monthly gross self-employment income of an individual who is self-employed before allowing the 40% deduction for expenses, or before deducting actual expenses.

  3. For a married couple, exempt $66.66 a month from earned income.

    • If both spouses have earned income, exempt $33.33 from each spouse's monthly gross earned income.

    • If only one spouse has earned income and the other does not, exempt $66.66 from the working spouse's earned income.

  4. Exempt $33.33 from the monthly gross earned income of a child who is head of the household.

  5. Exempt this amount beginning with September 2010 and continue the exemption through December 2010.

  6. If the earned income is less than $33.33 a month, do not exempt any portion of the Making Work Pay credit from the unearned income.

  1. Individual Development Account (IDA).  See Glossary.

Any earnings a client deposits into an Individual Development Account (IDA) must be deducted from countable income.  Also exclude from countable income matching funds contributed to an IDA and interest earned on the client's own contributions or matching funds.  (See 402-4 #6, Unearned Income Exclusions.)