340:10-3-33. Individual earned income exemptions
Exemptions from each individual's earned income include a monthly standard work related expense and one-half of the remaining earned income. Exemptions are also allowed for child and adult dependent care expenses the individual is responsible for paying if expenses are not paid through other state and federal funds and the dependent care is in a licensed facility or home. • 1 Exempt income is income that by law is not considered in determining need for financial assistance in the Temporary Assistance for Needy Families (TANF) category. Income exempt for one individual is not taken into consideration in determining the need of any other individual for assistance in the State Supplemental Payment (SSP) for the aged, blind, and disabled and TANF.
(1) Work related expenses. The standard deduction for work related expenses such as income tax payment, Social Security taxes, and transportation to and from work, is automatically determined monthly for each full-time or part-time employed member of the assistance unit. • 2 The standard deduction for work related expenses is:
(2) One-half remainder. For all countable income earned by each member included in the assistance unit, as well as a stepparent who is not included in the assistance unit, one-half of the remaining earned income is exempted per OAC 340:10-3-57(e)(1). The one-half remainder exemption is not applied to earnings received by participants while in the Subsidized Employment Program (SEP).
(3) Dependent care expenses. • 5 Dependent care expenses are applied after all other earned income exemptions.
(A) Dependent care expenses are not deducted from earnings of participants while in SEP. Dependent care expenses may be deducted when:
(i) suitable care for a child or incapacitated adult included in the TANF assistance unit is not available from responsible individuals living in the home or through other sources;
(ii) the employed TANF assistance unit member whose income is considered in computing the amount of the benefit must purchase care;
(iii) the gross earned income equals or exceeds the work related and dependent care expenses combined; • 6
(iv) the child or incapacitated adult receives care in a properly licensed facility or from an approved in-home provider as required by Oklahoma law; and • 7
(v) the stepparent of the child(ren) for whom TANF is requested is living in the home and has dependents not included in the assistance unit who are also living in the home per OAC 340:10-3-57(e)(1).
(B) Dependent care expenses must be verified. The actual amount paid per month is deducted up to a maximum of $200 for a dependent under the age of two years or $175 for a dependent two years of age and older or for an incapacitated adult. When considering the dependent care expense, only actual work hours and travel time between work and the care facility is allowed. Payment for dependent care is the individual's responsibility. The individual must immediately report any changes in the plan of care. • 8
(C) Dependent care provided by another individual in the household who is not a member of the assistance unit may be considered an expense as long as the caregiver meets applicable state, local, or tribal laws.
1.(a) The work related expenses, one-half of the remainder, and adult and child dependent care exemptions are not applied in determining the amount of overpayment for a month any individual included in the assistance unit or whose income is considered in determining the amount of the benefit failed to make a timely report of earned income.
(b) In calculating these exemptions, dollars and cents are used to determine the monthly amount for each individual's exemption.After the monthly amount of each exemption is determined, cents are rounded to the nearest dollar for each exemption.For example:1 cent - 49 cents, round down; 50 cents - 99 cents, round up.The payment standard minus the net income equals the amount of the assistance payment.
(c) Formulas used to determine net earned income to be considered against the budgetary requirements are:
(1) for income from self-employment, gross income:
(A) minus business expenses.Refer to OAC 340:10-3-32Instructions to Staff # 2 to calculate business expenses;
(B) minus work related expenses;
(C) minus one-half of the remainder;
(D) minus dependent care;
(E) equals net income.
(2) net earned income from employment other than self-employment.Gross income:
(A) minus work related;
(B) minus one-half of the remainder;
(C) minus dependent care;
(D) equals net income.
2.The system determines the amount of work related expense allowed based on the number of hours the worker enters in the "TANF Work Hours" field of the Family Assistance/Client Services (FACS) Eligibility Notebook Income tab and the age of the youngest child."TANF Work Hours" field must only be coded with 20, 30, or left blank.
3.An applicant or recipient with a child under six years of age, employed a minimum of 20 hours, is eligible for the $240 work related expense.
4.Refer to OAC 340:10-3-57(e)(1) for information on allocating or diverting income for these persons.
5.When dependent care services are needed for reasons other than employment, the worker determines dependent care expenses per OAC 340:40-7-1.
6.When the work related and dependent care expenses exceed the gross amount of earned income, the worker determines dependent care per OAC 340:40-7-1.
7.An approved in-home provider gives care in the child's own home.Refer to OAC 340:40-13-2 for in-home provider approval guidelines.
8.The worker is responsible for:
(1) helping the family select a caregiver capable of providing adequate dependent care, training, and supervision, per OAC 340:40;
(2) advising the family of their responsibility to pay for dependent care; and
(3) advising the family to immediately report any change in the plan of care.