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MS 5650 [2]

c. Tips

(1) Consider tips that appear on an individual's check stub to be allocated tips. Allocated tips are not included in the gross wages shown on an employee's pay stub but are used by the Internal Revenue Service (IRS) for audit purposes.

Allocated tips displayed on the check stub may or may not be representative of tips received. The employee is responsible for reporting and verifying, usually by keeping a tip log, the actual amount of tips received. If the individual states the allocated tips are representative of income received by the employee, use the allocated tip amounts when calculating the monthly tip income.

(2) Non-allocated tips are not shown on the employee's pay stub at all.

(3) Tips are counted and entered separately from the wage amount when entering the check stub verification on the system.

Example: The individual comes in for recertification in August. They state they are paid every week on Friday. They have a daily tip log and provide the prior two months (June and July) tips. They were paid on the following dates in June and July. Tips should be entered exactly as verified, without rounding, as amounts will be rounded by the system.

6/05/25 $14.75 7/03/25 $65.85 6/12/25 $61.24 7/10/25 $67.50 6/19/25 $72.25 7/17/25 $74.15 6/26/25 $72.50 7/24/25 $49.95

7/31/25 $91.95

The individual stated they only worked one day during the 6/05/25 pay period. The 6/05/25 tips are not considered, as they are not representative of ongoing tips.

The total tips earned for the weeks considered are $556.

d. If information supplied by the household or a collateral contact indicates future income will differ from the previously received income, use the pay-period(s) which are representative of ongoing wage payment to make a reasonable estimate of anticipated income.

Example: Individual receives occasional overtime once every few months; the check with the overtime would not be used as it is not representative of ongoing. Document the method used to determine income in the case.

e. If the income is not representative of the ongoing situation, enter the verified ongoing pay rate, hours worked in a pay period, how often paid, and the pay day on the system. When manually calculating the income to ensure the benefit amount is correct, do the following: