Dependent Child Income
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This section includes information about income received by participants under the age of 19 that are considered dependents.
Policy
When a dependent child is working, the income is not countable when the income type is not countable. When the income type is not countable, the age of the child and school attendance are not used to determine whether the dependent child’s income is countable. (See the specific income type to determine whether the income type is countable.)
For NA, earned income(g) of a dependent child, including self-employment(g) income, is not countable when all of the following occur:
●The dependent child is under the age of 18.
●The child is under the parental control(g) of an adult NA budgetary unit participant.
●The child attends school at least half-time, as defined by the school.
NOTE When school attendance is not verified, the income is countable.
For CA, earned income of a dependent child, including self-employment income, is not countable when the dependent child is one of the following:
●Under the age of 18 and attends school at least half-time, as defined by the school.
●Is age 18 and meets the CA student criteria by being a full-time student who is expected to graduate from high school before their 19th birthday. (See CA Student Criteria for school requirements and additional guidelines.)
Earned income of a dependent child is countable when any of the following occur:
●The dependent child is not attending school at least half-time as defined by the school.
●School attendance of the dependent child is not verified.
●For NA, the dependent child is not under the parental control of an adult NA budgetary unit participant.
●For NA, the dependent child is 18 or older.
●For CA, the dependent child is 18 or older and does not meet the CA student criteria.
For purposes of counting or not counting earnings of a dependent child, except when determining CA student criteria, school is defined as any of the following:
●Any recognized elementary, middle, high school or training program affiliated with these institutions.
●Vocational Training or General Education Development (GED) classes preparing the child for the GED examination.
●Home schooling recognized or supervised by the state or local school district
●For CA, an accredited correspondence course to obtain a high school diploma.
NOTE Consider the student as meeting school attendance criteria during temporary interruptions of school attendance due to semester recess or vacation periods. This applies as long as the child returns to school following the recess.
Countable income is used to determine an income budget. (See Income Budgeting to see how FAA determines the income budget.) FAA needs to know about income that is both countable and not countable to determine whether a budgetary unit’s expenses are exceeding their income. (See Income Eligibility for more information about how FAA uses countable and not countable income.)
Verification
The participant has the primary responsibility for providing verification. (See Participant Responsibilities – Providing Verification for additional policy.)
School Attendance Verification
School attendance needs to be verified for new applications, renewal applications, and when a change is reported for the dependent child who has earnings.
Student status verification sources to confirm whether a dependent child is in school at least half-time include, and are not limited to, any of the following:
●A completed Verification of School Attendance (FAA-0075A) form.
●A collateral contact with the school.
●A participant's statement when verification from the school is not available and attendance is not questionable(g).
NOTE Verification of home schooling from the school district is required when attendance is questionable.
Dependent Income Verification
For NA, all of the following income is required to be verified before eligibility is determined:
●Reported on a new application, during the interview of a new application, or changes reported before the eligibility determination of a new application.
●Changes after an eligibility determination of a new application (e.g., a renewal application, mid approval contact, etc.) and any of the following apply:
The source of the income has changed.
The income is questionable or unclear(g).
The reported income amount has changed by $51 or more.
The previous verification in the case file is more than 59 calendar days old.
For CA, all income is required to be verified before determining eligibility.
Examples of verification that can be used to verify dependent income when it is not considered self-employment income(g) include, and are not limited to, any of the following:
●System interface(g) when the participant agrees that the information is accurate.
●A copy of a paycheck stub.
●Copy of checks when the gross earnings are listed.
●A printout from a third-party payroll verification source provided by the participant.
●Third-party payroll verification sources when the employer uses the verification source as its legal agent to provide payroll services or respond to inquiries about employee records. (See Third-Party Payroll Verification Sources(g) for FAA approved sources, additional information, and instructions for requesting additional sources.)
●A New Employment Verification (C005) notice that is completed, dated, and signed by the employer or their payroll authority. To be considered complete, the statement needs to include all of the following:
Name, address, and telephone number of the employer
Gross pay for the periods needed
Frequency of pay (e.g., weekly, monthly, quarterly, etc.)
Day of the week or day of the month pay is received (e.g., Fridays, 5th and 20th of the month, first of the month, etc.)
Any expected change in pay
●For new or current employment verification, a completed Verification of New/Current Employment (FAA‑0053A) form that includes a date and the signature of the employer or their payroll authority.
●For terminated employment verification, any of the following completed items that include a date and the signature of the employer or their payroll authority:
Verification of Terminated Employment (FAA-1701A) form
Verification of Terminated Employment (C019) notice
●Letter from the agency providing government-sponsored training.
●Leave and Earnings Statement (LES) from the military.
●A collateral contact with the employer or their payroll authority.
NOTE Collateral contact is not used when contacting the employer would jeopardize the participant's employment or when the employer does not accept telephone verification.
●Participant statement verification when any of the following occur:
Other attempts to obtain verification have failed
Obtaining documented or collateral contact verification may cause harm or undue hardship(g) for the participant.
NOTE A participant’s statement is not allowed to verify income when it is considered questionable.
Examples of verification that can be used for dependent self-employment income and self-employment expenses include, and are not limited to, any of the following:
●Bookkeeping records
●Business ledgers listing income amounts received and expenses incurred
●Actual receipts
●Contracts for work
●Statements from patrons and companies
●Most recent Internal Revenue Service (IRS) U.S. Individual Income Tax Return (1040) form. Below are common IRS Schedule forms that the participant may provide in addition to the 1040:
Schedule C, Profit or Loss From Business
Schedule E, Supplemental Income and Loss
Schedule F, Profit or Loss from Farming
Schedules B-1, C, D, K, K-1, K-2, K-3, and M-3 of IRS U.S. Return of Partnership Income (1065) form (See Limited Liability Company (LLC) Definition for more information about LLCs.)
NOTE The most recent IRS 1040 and Schedule forms are can be used as verification of self-employment income and expenses when the participant indicates it accurately reflects the participant's current income.
●Rent or mortgage receipt for business property
●Property tax statements for business property
●Utility costs for business property
●Cleaning cost bills for business property
●Business location and equipment maintenance
●Personal records indicating personnel salaries or costs of outside labor, such as canceled checks and payroll checks
●Participant’s statement for self-employment income, when one of the following apply:
Other attempts to obtain verification have failed.
Obtaining documented or collateral contact verification may cause harm or undue hardship(g) for the participant.
NOTE Participant statement verification may be used to verify self-employment expenses unless questionable.
Self-employed participants may be eligible for a 40% expense deduction from income. To be eligible for the 40% Self-Employment Expense Deduction, only one allowable expense needs to be verified. When self-employment expenses are not verified using the verification process, eligibility is determined without the deduction. See Income Eligibility for the list of allowable self-employment expenses.
Legal Authorities
7 CFR 273.9(c)(7)
R6-12-504(21)
last revised 10/02/2023