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MEDICAL SERVICES – APPENDIX N, FAMILY MEDICALLY NEEDY RESOURCE AND INCOME LEVELS 02-24-16 Page 18 of 19 The first step in computing monthly gross income in these situations is to calculate the gross annual income for the previous calendar year. If available, the individual’s Federal Income Tax Return may be used to determine the annual income and the amount of costs related to producing the income. The annual allowable costs are subtracted from the gross annual income. The remainder is then divided by 12 to arrive at an average monthly amount. This figure is treated as gross earned income in the budget If the previous year’s income is not a fair reflection of the current year’s income, the worker will determine, by averaging recent months or other means, an amount which will fairly reflect the current year’s income. If the individual has been self-employed in the current enterprise for less than one year, the caseworker will average the income received to date to project future income. The worker will document the case record to clearly reflect the manner in which the income was determined and the justification for considering it a fair reflection of the current year’s income. 2. Income Received Monthly or More Frequently (Weekly, Daily, Etc.) Income of this type may include room and board, babysitting, sales from Avon, Tupperware, etc., or any other type of self-employment in which the income is received at least monthly as the work is performed. The first step in computing monthly gross income in these situations is to determine an average monthly gross based on the latest two months’ income. Verification of the latest two months’ gross income and costs related to producing the income will be obtained. After allowable self-employment costs are subtracted from the monthly gross, an average of the latest two months will be determined to arrive at the monthly gross earnings which will be included in the budget. If the latest two month’s income is not a fair reflection of the individual’s current income, then another method to determine the average monthly income will be used (e.g., an average of more than two months’ income). The worker will document the case record to clearly reflect the manner in which the income was determined and the justification for considering it a fair reflection of current income. F. Sources of Unearned Income The following are possible sources of unearned income: 1. Pensions, annuities, insurance benefits, Social Security, Railroad Retirement, Veterans’ Benefits, military allotments, Teachers’ Retirement, State Retirement, Workmen’s Compensation, Miners Pensions. 2. Payments received for the rental of rooms, apartments, dwelling units, building, or land. Taxes and the expenses of upkeep may be deducted.