WAG 15-06-01-h: Income of a Tax Dependent or Child of Another Person in the EDG

PM 15-06-01-h

Child and Tax Dependent Income Counting Examples

Example 1: Meg applies for herself, her husband, Dan, their child, Finn, age 3, and Meg's niece, Emma, age 17. Dan is a tax filer and plans to claim Finn as a dependent. Meg plans to file separately from Dan, and will claim her niece, Emma. Emma is employed, earns revised text$1175 per month and receives SSA income of $300 monthly. Finn has no income.

Determine EDG for: Tax Filer or Relationship? Who to Include? Who's income to count? EDG size
Meg Tax Filer Meg, Dan, Emma Meg, Dan, Emma 3
Dan Tax Filer Dan, Meg, Finn Dan, Meg 3
Finn (child/dependent) Relationship Finn, Meg, Dan Meg, Dan 3
Emma (child/dependent) Relationship Emma Emma 1

Results: Since Emma is expected to be required to file due to the amount of her earned income, all her income (revised text$1175 earned + $300 SSA) is counted in the tax payer's (Meg's) EDG. Emma's income is also counted in her own EDG.

Example 2: Alice applies for herself, her 17 year old daughter, Hope, and Hope's baby, Lola, 1 year old. Alice expects to file taxes and will claim her daughter and grandchild as dependents. Hope works part time, earns $200 per months and receives SSA income of $900 monthly. Lola has child support income of $300 per month.

Determine EDG for: Tax filer or Relationship Rule? Who to Include? Who's income to count? EDG size
Alice Tax Filer Alice, Hope, Lola Alice 3
Hope (child/dependent) Tax Filer Hope, Alice, Lola Alice 3
Lola (child/dependent) Relationship Lola, Hope Hope 2

Results: Do not count Hope's income in Alice's EDG since Hope is her child and is not expected to be required to file. Do not count Hope's income in her own EDG since she is not expected to be required to file and she is the child of another person in her EDG.

Hope's income revised text($200 earned +$900 SSA) is counted in Lola's EDG since Hope is not the child of another person in this EDG, and the tax payer who is claiming Hope is in a separate EDG. Lola's child support income is exempt for MAGI budgeting.