7304 FINANCIAL ELIGIBILITY REQUIREMENTS

7304.1 The Department shall determine an applicant's financial eligibility by determining countable income pursuant to § 7300.5(c) following Modified Adjusted Gross Income (MAGI) methodologies (based on federal income tax rules) to determine household composition, family size, and how income is counted during eligibility determinations for MAGI eligibility groups.

7304.2 For individuals who expect to file a federal income tax return or who expect to be claimed as a tax dependent by another tax filer for the taxable year in which an eligibility determination is made, household composition shall be determined as follows:

1. (a) The household of an individual who expects to be a tax filer consists of the tax filer and all of the tax dependents the tax filer expects to claim;
2. (b) The household of a tax dependent, except individuals identified at § 7304.5, consists of the tax filer claiming the tax dependent and all other tax dependents expected to be claimed by that tax filer;
3. (c) The household of a married individual who lives with their spouse consists of both spouses regardless of whether they expect to file a joint federal tax return or whether one (1) or both spouses expect to be claimed as a tax dependent by another tax filer; and
4. (d) The household of a pregnant woman consists of the pregnant woman plus the number of children she is expected to deliver. In the case of determining the family size of other individuals who have a pregnant woman in their household, the pregnant woman is counted herself plus the number of children she is expected to deliver.

7304.3 The Department shall consider an individual who expects to be both a tax filer and a tax dependent to be a tax dependent.

7304.4 For individuals who do not expect to file a federal income tax return or be claimed as a tax dependent for the taxable year in which an eligibility determination is made, household composition of an individual who expects to be a non-filer consists of the non-filer and, if living with the non-filer:

1. (a) The non-filer's spouse;
2. (b) The non-filer's children under age nineteen (19); and
3. (c) If the non-filer is under age nineteen (19), the non-filer's parents and any siblings who are also under age nineteen (19).

7304.5 Household composition shall be determined using the methodology described in § 7304.4 for the following:

1. (a) Individuals who expect to be claimed as a tax dependent by a tax filer who is not their spouse or biological, adoptive, or step parent, regardless of the individual's age;
2. (b) Individuals who are under age nineteen (19) living with both parents who do not expect to file a joint federal tax return, and who expect to be claimed as a tax dependent by one of their parents; or
3. (c) Individuals who are under age nineteen (19) and expect to be claimed by a noncustodial parent.

7304.6 MAGI-based income shall be determined using federal income tax rules for determining adjusted gross income except as otherwise provided in this Section. Countable income shall include the following:

1. (a) Wages, salaries, tips, and other forms of earned income;
2. (b) Taxable and tax-exempt interest;
3. (c) Ordinary dividends;
4. (d) Qualified dividends;
5. (e) Taxable refunds, credits, or offsets of state and local income taxes;
6. (f) Alimony received;
7. (g) Business income or losses;
8. (h) Capital gains or losses;
9. (i) Other taxable gains or losses;
10. (j) Taxable Individual Retirement Account (IRA) distributions;
11. (k) Taxable pensions and annuities – taxable amount;
12. (l) Rental real estate, royalties, income from partnerships, S corporations, trusts, etc.;

(m) Farm income or losses;

(n) Unemployment compensation;

(o) Taxable and tax-exempt Social Security benefits except as provided in § 7304.7(q) below;

(p) Lump sum payments (in the month received), including back pay, a retroactive benefit payment, State tax refund, or an insurance settlement; and

(q) Any other income reported on the Internal Revenue Service (IRS) Form 1040.

7304.7 Countable income shall exclude the following:

(a) Income scholarships, awards, or fellowship grants used for education purposes and not for living expenses;

(b) American Indian/Alaska Native income as defined in 42 C.F.R § 435.603(e);

(c) Educator expenses;

(d) Certain business expenses of reservists, performing artists, and fee-based government officials;

(e) Health savings account deduction;

(f) Moving expenses;

(g) Deductible part of self-employment tax;

(h) Self-employed Simplified Employee Pension (SEP), Savings Incentive Match Plan for Employees (SIMPLE), and qualified plans;

(i) Self-employed health insurance deduction;

(j) Penalty on early withdrawal of savings;

(k) Alimony paid;

(l) Individual Retirement Account (IRA) deduction;

(m) Student loan interest deduction;

(n) Tuition and fees;

(o) Public assistance benefits;

(p) Domestic production activities deduction; and

(q) Social Security Income benefits under Title XVI of the Act.

7304.8 Household income shall include the MAGI-based income of all individuals in a household except that:

(a) The MAGI-based income of an individual who is included in the household of his or her natural, adopted, or step-parent and is not expected to be required to file a federal tax return for the taxable year of an eligibility determination, shall not be included in household income, whether or not the individual files a federal tax return; and

(b) The MAGI-based income of a tax dependent, other than a spouse or child under age nineteen (19), who is not expected to be required to file a separate federal tax return for the taxable year of an eligibility determination, is not included in the household income of the tax filer who expects to claim the tax dependent, whether or not such tax dependent files a federal tax return.

7304.9 An amount equivalent to five percent (5%) of the Federal Poverty Level (FPL) for the applicable family size shall be deducted from household income only in cases where the individual's income is at or above the upper income eligibility limit of three hundred nineteen percent (319%) of the FPL for individuals aged zero (0) through eighteen (18), and two hundred sixteen percent (216%) of the FPL for individuals aged nineteen (19) or twenty (20).

7304.10 The Department shall base current financial eligibility for the Immigrant Children's Program on current monthly income.

7304.11 Current monthly income shall be calculated as follows:

(a) Income received on a yearly basis or less often than monthly, that is predictable in both amount and frequency, shall be converted to a monthly amount or prorated;

(b) If the amount or frequency of regularly received income is known, the Department shall average the income over the period between payments; or

(c) If neither the amount nor the frequency is predictable, the Department shall not average the income but count income only for the month in which it is received.

7304.12 An applicant adult who is in a minor applicant's household or family, or an authorized representative of an applicant, as identified in § 7301.23, shall attest to household income.

7304.13 The Department shall verify financial eligibility through one (1) or more federal and State electronic data sources.

7304.14 The Department shall use a reasonable compatibility standard to match financial information obtained from federal and State electronic data sources with attested application information.

7304.15 The reasonable compatibility standard for financial information shall be met when:

1. (a) The attestation and data sources are both above the Immigrant Children's Program's applicable income standard;
2. (b) The attestation and data sources are both below the Immigrant Children's Program's applicable income standard;
3. (c) The attestation is below the Immigrant Children's Program's applicable income standard and the data sources are above the applicable income standard, when the difference between them is less than ten percent (10%) of the amount given by data sources; and
4. (d) The attestation is zero (0) income and no income data is available from electronic data sources.

7304.16 The Department may require supplemental information where electronic data is unavailable or application information is not reasonably compatible with information obtained from an electronic data source.

7304.17 The Department may accept supplemental information reflecting current monthly income in the following forms:

1. (a) Paystubs;
2. (b) Completed employer verification form;

(c) Statement showing retirement income, disability income, Workers Compensation income, or a pension statement;

(d) Bank and checking account statement;

(e) Paper, electronic, or telephonic documentation; or

(f) If other documentation is not available, a statement which explains the discrepancy.

7304.18 The Department shall provide written notice to the applicant or beneficiary to provide supplementary information to verify financial eligibility, and the date by which an applicant or beneficiary shall provide the required information, consistent with § 7301.4.

7304.19 The Department may waive the verification required under this section for exceptional circumstances.

7304.20 Exceptional circumstances shall include:

(a) Homelessness;

(b) Domestic violence;

(c) Employer moved to another state or country;

(d) Business closed;

(e) Employer will not release information;

(f) Self-employed individuals who cannot produce documentation of income; or

(g) Other circumstances as identified on a case-by-case basis and approved by the Department.

SOURCE: Final Rulemaking published at 70 DCR 001668 (February 3, 2023).