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45. What is earned income?
The SNAP rules treat income as either earned or unearned. 106 C.M.R. § 363.220. Most earned income is counted for SNAP purposes. Benefit calculations allow a 20 percent earned income deduction from your gross earnings, unlike the treatment of unearned income. See Question 52 (What deductions are allowed against my income?).
Earned income includes
- Gross earnings from wages and salaries, including earnings diverted or garnished by an employer for a specific expense. 106 C.M.R. § 363.220(A). Money that is paid directly to your landlord for rent on top of your regular wages is excluded as a vendor payment. 106 C.M.R. § 363.220(C).
- Gross earnings from self-employment, after allowable business expenses, but before subtracting any income taxes or FICA. See Question 46 (How is self-employment income counted?).
- Income from boarders (persons who get a room and meals from you) after subtracting the cost of doing business, provided the boarder is not part of the SNAP household. See 106 C.M.R. § 365.200. See Question 32 (What if I am a boarder or I live in someone else's home?) on calculating boarder payments.
- Income from rental property minus business expenses, provided a household member manages the property for at least 20 hours per week. 106 C.M.R. § 365.930(A). If managed for less than 20 hours per week, it is considered unearned income. See Question 47 (What is unearned income?).
Note: Gross income is weekly or monthly income before taxes, FICA or other mandatory payroll deductions. Gross income does not include the value of employee "credits" for employee benefits such as health insurance that cannot be taken as cash by the employee. See Question 44 (What income is not counted?). However, do not include payments for legally obligated child support in determining a household's gross income. 106 C.M.R § 363.230(O). See Question 54 (What is the child support deduction?) on how child support payments are handled.
Additional Tips and Policy Guidance on Earned Income
- Missing wage information and date of termination from work can sometimes be verified through an internet-based employee verification system, called "The Work Number." If your employer subscribes to "The Work Number" website, you can also grant permission for the DTA to verify missing wage and date of termination information through that website. Your employer should have provided a user ID and PIN for the website. DTA Field Operations Memo 2007-3 (Jan. 31, 2007).
- Earnings of a child in school at least half-time not countable (rules less favorable than TAFDC). Transitions Hotline Q&A (Aug. 2003).
- School employees who receive salaries over a ten-month period have income averaged over 12-month period if employee works under a renewable annual contract. Transitions Hotline Q&A (May 2002).
- Short-term disability payments are treated as earned income (20% earnings deduction applies) if the payee is still considered an employee, intends to return to work, and the payments are made out of company funds versus an insurance company. Transitions Hotline Q&A (Sept. 1998).