A-1410, General Policy

Body

Revision 21-2; Effective April 1, 2021

All Programs except TP 45

Certain deductions may be allowed when determining countable income.

TANF

Households may be allowed the following deductions:

  • work-related expense deduction (up to $120);
  • 90 percent earned income deduction;
  • dependent care;
  • diversions; and
  • $75 disregard.

SNAP

Households may be allowed the following deductions:

  • 20 percent earned income deduction for households with earnings;
  • standard deduction;
  • medical costs for household members who are elderly or have a disability;
  • dependent care;
  • child support paid to or for non-household members;
  • homeless shelter standard;
  • excess shelter costs; and
  • Plan for Achieving Self-Sufficiency (PASS).

Medical Programs except TP 45

Households may be allowed the following Modified Adjusted Gross Income (MAGI) deductions:

  • standard MAGI income disregard;
  • alimony paid*;
  • educational expenses or student loan interest;
  • moving expenses (allowed only for active duty members of the military who are moving duty stations);
  • tuition or GI Bill deduction;
  • educator expenses;
  • expenses of fee-basis government officials, expenses of performing artists, and expenses of reservists;
  • health savings account;
  • deductible part of self-employment tax;
  • self-employed individual retirement account (IRA), simple IRA, and qualified plan deductions;
  • self-employed health insurance;
  • penalty on early withdrawal;
  • IRA deduction; and
  • domestic production activities deduction.

*Note: Alimony paid cannot be claimed as a MAGI deduction for divorce or separation agreements that are executed or modified after Dec. 31, 2018.

Persons with divorce or separation agreements effective on or before Dec. 31, 2018, can continue to claim alimony paid as a MAGI deduction until the agreement is modified. Follow verification and documentation policy when verifying the date of the divorce or separation agreement and the amount paid in alimony to allow the deduction.

TP 45

Because there is no income test, deductions are not considered as a factor in determining eligibility for TP 45.

Related Policy

Verification Sources, A-1441
Documentation Requirements, A-1450

 

A—1411 Rules That Apply to Deductions

Revision 15-4; Effective October 1, 2015

TANF and SNAP

Actual amounts (amounts that have already been billed) are used for the interview month, and amounts that have not been billed may be projected.

  • The following expenses are not deducted:
    • expenses paid to another member of the same Eligibility Determination Group (EDG);
    • expenses paid by a reimbursement, an exempt vendor payment or in-kind benefit (Exception: For the Supplemental Nutrition Assistance Program [SNAP], see A-1428.1, Allowable Medical Expenses, and A-1429.3, Utility Allowances); or
    • past-due balances, late charges or finance charges. Exception: For SNAP, expenses such as property tax that are averaged over the period between scheduled billings or over the period the expense is intended to cover are allowable even if the expense is paid or past due when reported.
  • The most recent month's bills are used to project expenses, and unexpected changes should be considered during the certification period.
  • Only household expenses expected during the certification period should be considered.
  • The income conversion factors are used to determine monthly expenses if expenses are billed weekly, biweekly or semi-monthly.

Deductions must not be allowed if:

  • verification of the expense is required;
  • the household fails to provide required verification; and
  • the advisor is not able to verify the expense directly using other automated systems that are acceptable verification sources and accessible to the advisor or through another method.

Note: The EDG must not be denied for failure to provide the verification.

SNAP

  • An expense is allowed, regardless of when or if the household intends to pay it.
  • If expenses are not averaged, the expenses should be deducted in the month the expense is billed (or the month it becomes due if no bill is sent). Exception: See A-1428.4, Change in Medical Expenses During Certification.
  • A deduction for expenses that are legally due monthly is allowed even when the household pays them in advance.
  • Households may choose to average expenses that fluctuate or occur less often than monthly. These expenses are averaged over the:
    • interval between scheduled billings, or
    • period the expense is intended to cover if there is no scheduled billing.

      Note: If the individual reports a change, the average is recalculated.

  • If the individual agrees with the provider to make installment payments for an allowable one-time expense, the individual can choose to have the agreed upon payments budgeted as the amount due in a given month.

Medical Programs except TP 45

MAGI rules allow certain expenses to be deducted from the individual’s income in order to determine the MAGI individual income.

  • For all MAGI expenses that have been verified using last year’s federal income tax return, take the expense amount from the federal income tax return and divide that amount by 12 to determine the monthly expense amount for use for applicant or recipient.
  • For the alimony paid expenses verified using other acceptable verification sources, use the actual amount verified for the MAGI alimony paid expense.