Earned income

Earned income is income that results from work, effort, or labor. Use gross earned income for income calculations. Gross earned income is income from employment before any payroll deductions. Gross earned income includes 401K contributions, all insurance premium payments on the pay stub and pre-tax medical/dental accounts. CCAP allows for certain income deductions. See Chapters 2 (Glossary) and 6.18 (Income Deductions).

Earned income includes:

· Wages/salaries (including overtime and bonuses). See Chapter 6.15.21 (Annualizing work bonuses and overtime pay).

· Paid vacation or sick leave.

· Tips/gratuities.

· Self-employment income. See Chapter 6.6.5 (Self-employment income).

· Commissions.

· Severance pay based on accrued leave time.

· Royalties.

· Honoraria.

· Other profit including:

o Uniform, mileage and meal allowances if federal income tax is deducted from the allowance.

o Incentive payments from work or training programs.

o Military pay or wages for members of the United States armed forces. Pay earned while in a combat zone is not counted.

Unearned income

Unearned income is a payment a family member did not expend individual effort or labor to receive. See Chapter 2 (Glossary) for the definition of unearned income. Use gross unearned income for income calculations. Unearned income includes:

· Cash assistance benefits, including, but not limited to:

o Cash portion of MFIP

o MFIP Housing Assistance Grant

o DWP

o Cost effective insurance reimbursement from Medical Assistance

o Minnesota Supplemental Aid

o General Assistance

o Refugee Cash Assistance.

· Interest or dividends from investments and savings.

· Capital gains as defined by the Internal Revenue Service from any sale of real property.

· Proceeds from rent and contract for deed payments in excess of the principal and interest portion owed on property. See Chapter 6.15.9 (Annualizing Rental Property Income) for more information about annualizing rental property income.

· Income from trusts, excluding special needs and supplemental needs trusts.

· Interest income from loans made by the family or a household member.

· Unemployment insurance income that is received by an adult member of the assistance unit unless the individual receiving unemployment insurance income is:

o 18 years of age and enrolled in a secondary school; or

o 18 or 19 years of age, a caregiver, and is enrolled in school at least half-time.

· Disability insurance payments.

· Worker’s Compensation

· Tribal per capita payments unless excluded by federal and state law.

· Retirement benefits including pension payments and veteran benefits.

· Child or spousal support, medical or child care support which is not assigned to the state.

· Retirement, Survivors, Disability Insurance (RSDI). RSDI may have gross and net amounts.

· Cash prizes and winnings.

· Income from members of the United States armed forces identified as entitlements unless excluded from income taxes according to federal or state law.

· Recurring cash gifts, including money gifts and prepaid credit card gift cards (i.e. a Visa gift card)

· Nonrecurring income over $60 per quarter. This may include some prepaid credit card gift cards (i.e. a Visa gift card) and lump sums such as insurance settlements, depending on the circumstances, and child support arrears. Do not count non-recurring income over $60 that meets one of the following conditions:

o Distributed as a tax refund, tax rebate, or tax credit,

o Provided as an in-kind benefit,

o Earmarked and used for the purpose for which it is intended, or

o When nonrecurring income is:

§ a reimbursement,

§ rebate,

§ award,

§ grant, or

§ refund of:

· personal property or real property or

· costs incurred or losses incurred.

and payment is made by:

§ a public agency, which includes any county and their subcontractors; federally recognized Indian tribe; or multicounty social services collaboratives;

§ solicitations through public appeal, such as GoFundMe;

§ a federal, state, or local unit of government;

§ a disaster assistance organization, or

§ pursuant to a court order.

NOTE: Income and payments from service and rehabilitation programs are not counted beginning November 1, 2022.

Expenses such as legal fees, may be needed to secure payment of unearned income or deductions may be withheld from an unearned income source. Expenses and deductions must be verified to be an allowable deduction from the unearned income (except for expedited child care applications). If the expense is not a verified allowable deduction, do not allow the expense as a deduction and count the full amount of the unearned income. If the expense is a verified allowable deduction, deduct the expense from the full amount of the unearned income.

For example, the RSDI award letter will identify a gross amount, a Medicare premium, and the net amount. The gross amount of RSDI is the amount to be annualized minus the Medicare premium as this is a verified allowable deduction. See Chapter 6.18 (Income Deductions).

Other financial supports not identified above – Not counted

Financial supports not identified above as earned or unearned income are not counted as income. If a family reports income that is not counted, it is recommended that the worker enter the reported amounts into MEC² in the appropriate category or in the “Other, not counted” income type.

Financial supports that are not counted include, but are not limited to:

· Supplemental Security Income (SSI).

· Student Financial Aid.

· Northstar Care for Children payments for Foster Care, Adoption Assistance, and Kinship Assistance.

· Legacy Foster Care, Adoption Assistance and Relative Custody Assistance payments.

· AmeriCorps Service Allowances.

· Other service program income.

· Rehabilitation (rehab) programs such as vocational rehabilitation programs and services.

· Earning and payments to individuals participating in programs under Title 1 of the Workforce Investment Act and other training program income.

· State and federal tax refunds and other recurring or non-recurring tax credits such as earned income tax credits and child tax credits.

· Establishment gift cards issued by a particular retailer or for a particular good or service (i.e., a Target or Walmart gift card).

· Student training program income. See STUDENT TRAINING PROGRAM in Chapter 2 (Glossary).

· Minnesota Frontline Worker Payments.

Legal authority

Minnesota Statutes 119B.09
Minnesota Statutes 119B.011
Minnesota Statutes 256P.01
Minnesota Statutes 256P.06
Minnesota Rules 3400.0020
Minnesota Rules 3400.0170
Minnesota Session Law 2022, Chapter 50, Article 2