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a. Unearned Income

Count rental income as unearned income if the a/b rents property, machinery, rooms, etc. and rental is not done as a business.

b. Earned Income

Count rental income as self-employment if the a/b has a property rental business, rental service, etc.

2. Determination of Net Rental Income

Adjusted gross rental income is gross rent less allowable operational expenses paid in the base period. Use adjusted gross rental income in the 6% test when determining if property is income producing for reserve purposes. Refer to MA-2230, Financial Resources.

3. Verification Sources of Rental Income and Operational Expenses

a. A/B’s business records.

b. A/B’s IRS tax statement.

c. Renter's statements or receipts. Obtain a signed rental statement at application and every recertification.

d. Information available from the banks or real estate agents.

4. Base Period for Rental Income Received other than Monthly

Use the following base period for computing rental income received other than monthly:

a. Applications

1) The base period is the prior calendar year's income as listed on tax records or up to 12 months income from current business records prior to the month of application or review if there are no tax records.

2) Number of months operating the business or rental property if less than 12 calendar months.

b. Retroactive Medicaid