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OBSOLETE POLICY CHIP MANUAL |
Effective: July 1, 2010 - August 31, 2010
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.
Earned income received by a child who is not the head of household. See section 401-3 for more information.
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.
Making Work Pay Tax Credit
This tax credit is allowed on all earned income from April 1, 2009 to December 31, 2010. The credit is the lower of 6.2 percent of a person’s earned income or a $400 maximum disregard annually ($800 for a joint return). Individuals will see an increase in their take-home-pay due to this credit. Deduct the amount of the Making Work Pay tax credit from the individual’s gross income before counting their earned income to determine eligibility. Deduct the Making Work Pay tax credit before other earned income deductions. Do not deduct more than the annual maximum in a calendar year. Self-employed persons may claim the credit on their income tax returns. Do not count this credit when received as part of an individual’s tax return.
TIP: At 6.2% of gross earnings, the maximum credit of $400 is reached when an individual has earned $6451 in a year. However, in 2009, the tax credit did not begin until April 2009.
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.)