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Effective: March 1, 2009 |
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20.25.25ar2 - Seasonal Income (Archive) |
Archived: May 1, 2010 |
Seasonal income is income that is regularly received for only part of the year. How to count seasonal income varies by program.
Verifying and Calculating Repeated Seasonal Income.
Verifying New Seasonal Income.
Calculating New Seasonal Income.
The type of verification for seasonal income varies depending on whether the applicant or enrollee has been employed repeatedly at the same seasonal job, or it is new employment that is expected to be seasonal. Seasonal income is annualized.
Verifying and Calculating Repeated Seasonal Income
1. Request the prior year’s U.S. Individual Tax Return (1040, 1040A or 1040EZ) and W-2 form to verify wages and unemployment compensation (if received) if the person was seasonally employed the previous year and expects to be seasonally employed to the same extent in the current year.
n Use the annual wage amount and annual unemployment compensation amount found on the tax return in the income calculation.
n Consider it new seasonal employment if the tax form does not reflect a full season and off-season cycle.
2. Follow the instructions for new seasonal employment below and annualize the income based on whether they are currently working or in the off-season for applicants and enrollees who have been repeatedly seasonally employed but assert that the prior year tax forms do not accurately reflect the seasonal employment they expect to have this year.
Verifying New Seasonal Employment
1. Request pay stubs from the applicant or enrollee from the past 30 days to verify new seasonal employment.
2. Request an Employer Statement (DHS-4279) completed by the employer if:
n Pay stubs from the past 30 days are not available, or
n The person has not worked long enough to establish a 30-day pay record.
Calculating New Seasonal Income
1. Annualize the pay stubs or the pay amounts shown on the Employer Statement as you would for year-round employment. Project a full year of employment.
2. Use the hourly wage and average number of hours worked per pay period from the Employer Statement to annualize income if the person has not been working long enough to establish a 30-day pay record. Project a full year of employment.
3. Calculate annual income based on any unemployment compensation the applicant or enrollee is receiving when he or she does not have a prior year tax record of their seasonal employment and is in the off-season of their work cycle. Project a full year of unemployment compensation.
Send a note or worker memo to remind an enrollee to contact the agency when the employment ends or if he or she begins receiving unemployment compensation in the off-season when MinnesotaCare is approved pending-awaiting-payment for a person with new employment known to be seasonal.
1. Recalculate annual income based on the new situation (zero income or unemployment compensation) when this change occurs.
2. Use the prior year 1040 tax form and W-2s to calculate seasonal employment income once the enrollee has been seasonally employed long enough to include a full year of employment and off-season on a tax return.
Note: Treat applicants and enrollees who are employed year-round, but who actually work and are paid for only part of a year, as seasonally employed for purposes of calculating their annual wage income.
Example:
Judith is a teacher who applies for MinnesotaCare. She is employed year-round for a local school district, but she does not work or receive wages during the summer months. She does not qualify for unemployment compensation.
Action:
n Verify Judith’s wages using her prior year 1040 Individual Tax Form and W-2 form if she was employed the entire previous year for the school district.
n Calculate income based on her current work status if the tax form does not reflect a full year of employment.
m Require the past 30-day’s pay stubs or an Employer Statement if she is currently working and annualize this income.
m Consider her annual income to be zero if she is not currently working and has no current income. Remind Judith to report when her work status changes. Once Judith has worked for the school district for a calendar year, use the prior year 1040-tax form and W-2s to calculate her annual
MA Method A, MA Method B, MA-EPD, Medicare Savings Programs, Long-Term Care, GAMC-Full Benefits, GAMC-Hospital Only, and Transitional MinnesotaCare
Clients who are seasonally employed may be self-employed or may work for others.
l Self-employed.
Treat income from seasonal self-employment in the same way as year round self-employment.
Exception: For MA-EPD count seasonal self-employment only in the months in which the person is engaged in work activity.
l Employed by Others.
When clients are seasonally employed by others, estimate income anticipated to be received during the certification period including earnings and any Unemployment Insurance anticipated to be received.
Note: Document specific income verifications used, and explain the calculations that were done to anticipate countable gross income.
Example:
Tom applies for GAMC in January. He was laid off from his job as a roofer in November and is receiving Unemployment Insurance. Based on previous years' experience, he expects to resume work in April. He is requesting GAMC to begin in January.
Action:
n January - April: Use Unemployment Insurance payments received or expected to be received in January through the date Tom expects to return to work in April.
n April - June: Use earnings from the same period for the previous year as a guide.