2605. What is earned income?

Earned income consists of the following:

2605.1 How is earned income counted?

We may count more earned income than the individual actually receives. We count more than the individual actually receives if amounts are withheld from earned income because of a garnishment, or to pay a debt or other legal obligation such as taxes, or to make any other payments such as for health insurance.

We count wages, services in a sheltered workshop, royalties, and honoraria at the earliest of the following points:

We count the current market value of in-kind earned income. If the individual receives an item that is not fully paid for and is responsible for the unpaid balance, only the paid up value is counted as income.

We count net earnings from self-employment on a taxable year basis. If the individual has net losses from self-employment, we deduct them from the individual's other earned income. We do not deduct net losses from the spouse's earned income. If the individual with a net loss does not have other earned income, no deduction is applicable. We do not deduct the net losses from the individual's or spouse's unearned income.

2605.2 What are earned income exclusions?

While it is necessary to ascertain the sources and amounts of all of an individual's earned income, we do not count all of it to determine whether the individual is eligible for extra help with prescription drug costs. These are earned income exclusions.

We do not count as earned income the following:

Last Revised: Apr. 18, 2006