PM 07-02-13

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Federal Tax Refunds

If assets cause ineligibility, ask the unit if they received a Federal tax refund in the last 12 months and what amount they received. There is no need to verify the federal refund. If they did receive a Federal tax refund, subtract the Federal tax refund from the total amount of assets. If the difference between the resources and the amount of the Federal tax refund is less than the resource limit, the unit remains eligible.

Example 1: On February 21, Ms. A applies for AABD for herself. On the application Ms. A reports a savings account with $3400. At the interview, the worker asks Ms. A if she received a Federal tax refund in the last 12 months and she reports that she received a $1510 refund.

The worker subtracts the $1510 from the total assets of $3400 and is left with a balance of $1890. $1890 is below the AABD asset limit of $2000 for one person so Ms. A is eligible for AABD.

State Tax Refunds

When a client reports receipt of a revised text State tax refund:

  1. Verify the refund amount by viewing the tax refund check or the client's revised text State Tax Return.
  2. Determine what portion of the check is tax refund, and if any, an Earned Income Credit (EIC) payment.
  3. Add the tax refund portion to other nonexempt assets, and compare the total to the asset limit.

The amount received as an EIC payment is exempt as both an asset and as income.

When a client claims to have received less than half of a joint income tax refund, accept their statement of the amount received.