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S N A P M A N U A L

160 1 2 . 3 E A R N E D I N C O M E D E D U C T I O N Twenty percent of gross earned income as defined in Section 11.3 Earned Income is disregarded for each employed household member. This disregard is intended to cover payroll deductions such as State, and local income taxes, money set aside for retirement purposes, and other work-related personal expenses (such as transportation to and from work). Earnings excluded in Section 11.6 Income Exclusions will not be included in gross earned income for purposes of computing the earned income deduction. The earned income deduction is not applied when: • The Benefit Integrity Claims Specialist calculates an intentional program violation claim (See Chapter 23 Claims Against Households). • When determining an overpayment due to the household failing to report earned income in a timely manner. For self-employment income (See Section 11.4 Self-employment Income) the cost of doing business should be deducted from the gross income before the 20% deduction is applied. For self- employment income where there is a farm loss: (A) Compute the total gross farm self-employment (B) Subtract the allowable costs of doing business (C) Compute the total gross non-farm self-employment (D) Subtract the allowable costs of doing business and any farm losses Apply the earned income deduction to any net profit. If there is no net profit, there is no earned income deduction. If the household has a farm loss to be offset against earned income that is not from self-employment, the earned income deduction is computed based on this remaining earned income.

1 2 . 4 S H E L T E R D E D U C T I O N (1) Excess shelter deduction Excess shelter deduction is the monthly shelter expenses in excess of 50 percent of the household's income after all other deductions have been allowed (See Section 12.1 (C) Income Deduction/General (Maximum Excess Shelter Deduction). Households containing a member (or members) who are elderly or disabled (See Section 14.10 Definition of Elderly or Disabled) are entitled to an unlimited excess shelter deduction. All other households are entitled to a limited excess shelter deduction not to exceed the amount noted in Section 12.1 (C) Income Deduction/General (Maximum Excess Shelter Deduction).