Page 302

Dependent Care Deduction Deduct the actual amount paid out-of-pocket for the care of each dependent child or incapacitated adult living in the home. Effective October 1, 2008, there is no cap to this deduction. The child care may not be paid to a member of the group and must be necessary for a household member: • to accept or continue employment, • to comply with employment and training requirements, or • to attend training or pursue education which will help the individual prepare for employment (provided these expenses are otherwise covered by an educational benefit or program). Unlike in TANF and MA, the dependent care deduction in FS can be used to reduce either earned or unearned income. Expenses are not allowed if paid in goods or services (payment-in-kind). Example Ms. Hicks is employed and permits a neighbor to use her garage in payment for babysitting for her children. Ms. Hicks estimates the use of the garage to be valued at $150 per month. The expense is not allowed because the payment is in-kind and is not a cash payment. Child Support Deduction Legally obligated child support paid by a group member to a non-group member, including payments made to third parties or to a state child support agency such as CSED (or similar agencies in other states), is deducted from the group's income. Payments made toward child support areas shall also be deducted. Alimony payments shall not be deducted from the group's income. To be deducted from the group's income, the child support must actually be paid. Excess Shelter Deduction An income deduction is allowed for monthly shelter costs which exceed 50 percent of the group's income after the earned income, standard, excess medical, dependent care, and child support deductions have been applied. Shelter expenses are allowed when billed. The expenses do not have to be paid to be allowed. Shelter expenses include the costs necessary to maintain a residence including utilities. A group containing an elderly or disabled person may receive a deduction equal to the full amount by which its shelter expenses exceed 50 percent of the group's income (net of all other deductions). All other households may receive the lesser of the difference between its shelter expenses and 50 percent of the group's income (net of all other deductions) and the Shelter Cap. Effective October 1, 2013, the shelter cap is $478. Allowable shelter expenses include the principal and interest charges for: • continuous costs for the shelter occupied by the household such as rent, mortgage, or other costs leading to the ownership of the property; • repayment of a loan to purchase a mobile home;