442-2 EARNED INCOME EXCLUSIONS

442-2 EARNED INCOME EXCLUSIONS

Some earned income is excluded when determining income eligibility for the APA program. Earned income exclusions never reduce earned income to less than zero. Unused earned income exclusions are never applied to unearned income.

Earned income exclusions are applied in the order in which they are listed in this section.

442-2 A. EARNED INCOME EXCLUSIONS AUTHORIZED BY FEDERAL LAWS

Income exclusions specifically authorized by federal laws are excluded from income. Refer to section 442-3A for a listing of these exclusions.

442-2 B. EARNED INCOME TAX CREDIT AND CHILD TAX CREDIT PAYMENTS

The Earned Income Tax Credit ( EITC ) is a special tax credit which reduces the federal tax liability of certain low income working taxpayers. This tax credit sometimes results in a payment to the taxpayer. EITC payments can be received as a payroll advance from an employer or as an end-of-the-year income tax refund.

The Child Tax Credit is a special refundable federal tax credit that is available to certain low income taxpayers with earned income. This Child Tax Credit may provide a refund to individuals even if they do not owe any tax. There is no advance payment with the Child Tax Credit

Any EITC or Child Tax Credit payments received either as an advance or as a tax refund are excluded from income, regardless of the tax year involved.

Verification. An individual's paycheck stub or a copy of the individual's income tax return may be used to verify the amount of an EITC or Child Tax Credit payment.

442-2 C. INFREQUENT/IRREGULAR EARNED INCOME

Up to $30 of earned income in a calendar quarter may be excluded if it is infrequent or irregular. (See section 442-1A for policy on the infrequent/irregular income exclusion.)

442-2 D. STUDENT EARNED INCOME EXCLUSION

The earned income of a blind or disabled student is excluded subject to monthly and yearly maximums. Earned income that exceeds the maximum limits is not excluded. The monthly and yearly limits are shown in Addendum 1 . These amounts are updated every year.

For the purposes of this exclusion, the student must be under the age of 22 and regularly attending school, college, or training that is designed to prepare him or her for a paying job. Regular school attendance means the individual takes one or more courses of study and attends classes:

At least 8 hours a week in a college or university; or

At least 12 hours a week in grades 7 - 12; or

At least 15 hours a week in a course of training to prepare the individual for a paying job if the course involves shop practice; or

At least 12 hours a week in a course of training to prepare the individual for a paying job if the course does not involve shop practice.

School attendance of less than the hours listed above may be allowed if the reason for the shorter hours is beyond the student's control (such as an illness) and the circumstances justify the reduced credit load and attendance. An individual is considered to be attending school during school vacations if he or she intends to return to school once the school vacation ends.

Verification. School attendance may be verified by viewing documents in the individual's possession such as a school ID card, tuition receipt, or any other school records that indicate enrollment and hours of attendance. If either enrollment or hours of attendance are questionable, verification from the school or agency providing the training is required before this exclusion is allowed.

442-2 E. $20 PER MONTH GENERAL INCOME EXCLUSION

Any portion of the $20 general income exclusion which has not been excluded from unearned income in the same month is excluded from earned income. The $20 per month general income exclusion is allowed only once to a couple, even when both members have earned income, because the couple's earned income is combined in determining APA payments. (See section 442-1B for the policy on the $20 per month general income exclusion.)

442-2 F. $65 EARNED INCOME EXCLUSION

$65 per month of any earned income is excluded from the gross amount of any remaining earned income. The $65 earned income exclusion is allowed only once to a couple, even when both members have earned income, because the couple's earned income is combined in determining APA payments.

442-2 G. IMPAIRMENT RELATED WORK EXPENSES FOR DISABLED

Any earned income that a disabled individual uses to pay for impairment-related work expenses is excluded from income. Impairment-related work expenses are any reasonable expenses for items or services that are necessary for the disabled individual to work, and that are directly related to the individual's impairment.

Note: An individual over 65 can qualify for an IRWE if they received SSI or APA the month before turning 65.

Items that may qualify for this exclusion include but are not limited to:

Transportation to and from work if special transportation is needed because of the impairment;

Vehicle modifications;

Attendant care services which are necessary to prepare the disabled individual for work, or which are necessary in the workplace; and

Medical devices such as a wheelchair, respirator, pacemaker, inhalers, or braces;

Any other medical or nonmedical equipment or supplies which are necessary for the disabled individual to work, and are directly related to the individual's impairment.

Verification. All impairment-related work expenses must be verified before this exclusion may be allowed. Acceptable sources of verification include copies of bills and receipts, or other documentation which verifies the amount of the expense.

442-2 H. ONE-HALF OF REMAINING EARNED INCOME

One-half of any earned income is excluded from the gross amount of any remaining earned income.

442-2 I. WORK EXPENSES FOR THE BLIND

Any earned income that a blind individual uses to meet work expenses is excluded from income.

The blind work expense income exclusion is different from the impairment-related work expense income exclusion. For an impairment-related work expense to be allowed as an income exclusion, the expense must be directly related to the disabled individual's impairment and must be necessary for the individual to work. The blind work expense income exclusion is allowed for any work expense, whether or not the expense is directly related to the individual's blindness.

Note: Any individual over 65 can qualify for a work expense for the blind if they received SSI or APA the month before turning 65.

Items that may qualify for this exclusion include but are not limited to:

All items allowed under the impairment-related work expenses exclusion;

Note: If an individual uses his or her own vehicle for transportation to and from work, the blind work expense exclusion allows the business mileage rate permitted by the Internal Revenue Service. Go to https://www.irs.gov/tax-professionals/standard-mileage-rates for current standard mileage rates. The actual cost of transportation is allowed if the individual uses other than his or her own vehicle.

The amount paid for business licenses, professional association dues, or union dues;

Federal, state, and local income taxes withheld from earned income;

Mandatory pension contributions withheld from earnings by the employer; and

The value of meals consumed during work hours.

Verification. All work expenses for the blind must be verified before this exclusion may be allowed. Acceptable sources of verification include copies of bills and receipts, or other documentation which verifies the amount of the work expense.

442-2 J. AMOUNT TO FULFILL A PLAN FOR ACHIEVING SELF-SUPPORT

Any earned income used to fulfill an approved plan to achieve self-support is excluded from income. (See section 442-1C for the policy on this income exclusion.)