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MISSISSIPPI DIVISION OF MEDICAID Eligibility Policy and Procedures Manual CHAPTER 200A – Income: ABD Categories Page |109 Effective Month: July 2025 SITUATION METHOD Exception: Do not use this method for businesses which are seasonal or have unusual income peaks at certain times of the year, go to the next applicable procedure. • Ascertain net profit to date and • Project that net profit for the entire taxable year. When an individual: • Is engaged in a new business and records are not yet available; or • The business has been going on for some time, but no records were kept. Individual’s Estimate: • Obtain a signed allegation of the individual’s best estimate. • The individual must be directed to keep business records. Business records or a tax return will be needed at the next review.. SITUATION METHOD When an individual: • Alleges his NESE for the current year will vary from NESE for past years; and • Gives a satisfactory explanation for the variation (and provides relevant documentation if NESE is lower). NOTE: In some cases, such as a downturn in the economy, there may not be any documentation of the event. In such cases, the individual’s written statement for the variation is sufficient documentation. Current Year’s Estimate Varies from Past Records • Obtain a written statement from the individual explaining the basis for the NESE variation. • If the individual’s estimate of NESE for the current year is higher than that of the prior years, and the individual satisfactorily explains why, accept the individual’s estimate of NESE. Example: Individual recently added new products to his mail order sales catalog and sales have dramatically increased. • If the individual’s estimate of NESE for the current year is lower than that of prior years and the individual’s explanation explains why satisfactorily, request any