Current through Register Vol. 35, No. 6, March 26, 2024
Household expenses which can be deducted from income include
only certain costs of dependent care, child support, medical and shelter
expenses.
A.
Expenses not
allowed as deductions:
(1)
Vendor payments and reimbursements: An expense covered by an excluded
reimbursement or vendor payment is not deductible. Vendor payments are those
paid directly to a household's creditors by a non-household member, while
reimbursements are paid to a household after it has paid creditors.
(2)
Reimbursable medical
expenses: That portion of an allowable medical expense which is
reimbursable will not be included as a household's medical expense when
calculating the medical expense deduction.
(3)
Service provided by household
member: Expenses will be deductible only for a service provided by
someone outside a participating household, and for which the household makes a
money payment. Only money received from an outside source is considered income
to a household; money paid to a provider outside the household is counted as a
deductible expense.
(4)
Child care expenses: Child care expenses which are reimbursed or paid
for by the Jobs Opportunities and Basic Skills Training Program (JOBS) under
Title IV-F of the Social Security Act [ 42 USC 681 ] or the transitional child
care (TCC) program will not be deductible when calculating the dependent care
deduction allowed for a household.
(5)
Child support expenses: A
child support deduction will not be allowed if the household does not report or
verify its monthly child support payment or a change in its legal
obligation.
B.
Billed expenses:
(1)
Allowing a
deduction: A deduction is allowed only in the month the expense is
billed or otherwise becomes due, regardless of when the household intends to
pay it.
(2)
Arrears:
Amounts carried forward from past billing periods (arrears) are not deductible,
even if included in the most recent billing and actually paid by the household,
unless these expenses are billed less often than monthly and are averaged. A
particular expense may be deducted only once. Rent, mortgage payments or
property taxes that are in arrears are not allowed, even if they were not
previously allowed in any certification period.
(3)
Expense not allowed: If a
household receives a bill during the certification period but does not report
it until it is past due, the expense may not be allowed as a deduction.
Similarly, late charges assessed to a household on a past due bill are not
allowed as a deductible expense.
(4)
Billed medical expenses: If
a household claims a deduction for billed medical expenses, but does not know
or cannot verify the portion of billed expenses that will be reimbursed, the
expense is allowed after the reimbursement is received or can otherwise be
verified, rather than in the month the bill is received. Only the unreimbursed
amount of the bill is deductible. A deduction will be allowed when the
household verifies that a billed medical expense will not be paid directly to
the provider by a third party, or will not be reimbursed to the household by an
insurance company or government program.
(5)
Child support deduction:
(a) Child support is not an allowable
deduction when billed. Verification of payment must be received prior to
allowance of the deduction.
(b) The
child support deduction will include amounts paid toward arrearages, provided
that the household has at least a 3-month record of payments.
C.
Anticipating
expenses: A household's expenses will be calculated based on the
expenses the household expects to be billed during the certification period.
(1) Anticipation of expenses is based on the
most recent month's bills, unless the household is reasonably certain a change
will occur.
(2) If actual costs for
a household's heating/cooling or other utility expenses are anticipated to be
less than the appropriate mandatory utility standard, the appropriate mandatory
utility standard shall be allowed.
(3) Income conversion procedures will apply
to anticipated expenses billed on a weekly or biweekly basis.
(4) Child support will be anticipated based
on actual payments during past months and reasonably certain changes expected
in the future.
D.
Averaging expenses: A household may choose to have fluctuating expenses
averaged.
E.
One-time
expenses: A household may choose to have a one-time only expense
averaged over the entire certification period, or allowed in the month the
expense is billed or becomes due.
(1) If a
household chooses the one-time expense deduction, the caseworker will document
the expense in the case file. Such expenses include annual property taxes and
insurance.
(2) A one-time expense
may be averaged over the period the billing is intended to cover.
(3) A household may choose to have a one-time
only expense reported at certification deducted in a lump sum or averaged over
the certification period.
(4) A
household reporting a one-time only medical expense during its certification
period may choose to have a one-time expense deduction or to have the expense
averaged over the remaining months of the certification period.
(a) If a household incurs a one-time only
medical expense and makes arrangements with the provider to pay in monthly
installments (beyond the current certification period), the expense may be
allowed each month as arranged.
(b)
A household reporting a one-time only medical expense during the certification
period may choose to have a one-time deduction or to have the expense averaged
over the remaining months of the certification period. Averaging would begin
the month the change becomes effective.
(c) If a household is billed for and reports
an expense during the last month of the certification period, the deduction may
not be allowed unless it will be paid in installments during the following
certification period. The deduction will be allowed during the appropriate
number of months in the following certification period.
F.
Expenses billed less
often than monthly: Households may choose to have expenses which are
billed less often than monthly averaged forward over the interval between
scheduled billings or, if there is no scheduled interval, averaged forward over
the period the expense is intended to cover. Averaging may be used even if the
bill is received before the certification period. Averaging is governed by the
scheduling of the bill or the period the expense is intended to
cover.
G.
Fluctuating
medical expenses: Fluctuating medical expenses will be allowed as
deductions if regularly recurring, reasonably anticipated, and verified.
Medical expenses will not be calculated by averaging past months' medical
expenses. Past expenses are used only as an indicator of what can reasonably be
anticipated.
H.
Dependent
care: Dependent care expenses paid on a weekly or biweekly basis will be
averaged if a household has chosen to average income. Conversion procedures
will be used if a household is billed on a weekly or biweekly basis.
