NORTH DAKOTA DEPARTMENT OF HUMAN SERVICES
BISMARCK, NORTH DAKOTA
February 14, 2011

IM 5112

TO:		County Social Service Directors
Economic Assistance Policy Regional Representatives
Economic Assistance Policy Quality Control Reviewers

FROM:	Tove Mandigo, Director, Economic Assistance Policy
		Maggie Anderson, Director, Medical Services
		
SUBJECT:	Tax Refunds

PROGRAMS:	TANF, SNAP, LIHEAP, CCAP, Medicaid Eligibility, and Healthy Steps

EFFECTIVE:	January 1, 2011

RETENTION: 	Until manualized or December 31, 2012.

SECTIONS 	 
AFFECTED:	TANF:	400-19-55-05-30 – Exempt Assets
	LIHEAP:   	415-25-05-30 – Income Not Counted
	CCAP:  	400-26-20-10 – Income Exclusions 
			400-26-20-13 - Assets
		SNAP:	430-05-50-25-45 – Non-Recurring Lump-Sum Payments
			430-05-50-30 – Income Excluded by Federal Law
		Medicaid:	510-05-70-30 – Excluded Assets
			510-05-85-25 – Post Eligibility Treatment of Income
			510-05-85-30 – Disregarded Income
	Healthy 
	Steps:  	510-07-40-30 Disregarded Income

The Tax Relief, Unemployment Insurance reauthorization and Job Creation Act of 2010 (P.L. 111-312), which was signed into law on December 17, 2010, includes a provision that requires all programs funded in whole or in part with Federal funds, to disregard Federal tax refunds, including refundable tax credits such as EITC, as income and assets for a period of 12 months from the month of receipt.   

This disregard is effective for all tax refunds received after December 31, 2009 through December 31, 2012.  Even though this is effective with tax refunds received after December 31, 2009, this provision only applies to eligibility and benefit determinations effective December 17, 2010.

If households were denied benefits on or after December 17, 2010, or their case closed on or after December 31, 2010 due to the receipt of a tax refund, benefits must be restored.

Child Care Assistance Program
Federal or state income tax refunds are disregarded as income.  

Assets are not considered for the Child Care Assistance Program. 

LIHEAP
Federal and state income tax refunds, including Earned Income Tax Credits (EITC) are not counted as income.

Federal and state income tax refunds, including Earned Income Tax Credits (EITC) are not counted as an asset.

Medicaid, Healthy Steps and Basic Care
Federal and state income tax refunds are currently disregarded as income in non-LTC eligibility and budget determinations.  Such refunds received in 2011 and 2012 will also now be disregarded when budgeting LTC recipients.

Medicaid asset provisions at 510-05-70-30(11) currently exclude federal and state tax refunds for nine months after receipt.  The federal portions of these refunds that are received in 2011 or 2012 are now excluded for 12 months after receipt.  The state portion remains excluded for only nine months.

SNAP
Current policy excludes Federal and state income tax refunds as income and considers them an asset in the month received.  Earned Income Tax Credit (EITC) payments are currently excluded from income and asset consideration for the month of receipt and the following month.  However, if the individual was participating at the time of receipt, the exclusion continues for as long as they remain participating up to a maximum of 12 months.  Breaks of one month or less due to delayed reviews are not considered as nonparticipation in determining the 12-month exclusion.    

Based on this policy change, Federal tax refunds, including EITC payments, will now be excluded from income and asset consideration for a period of 12 months from the month of receipt regardless of participating in the program at the time of receipt.  

TANF
Federal or state income tax refunds are disregarded as income.

Federal tax refunds are exempt for a period of 12 months from the month of receipt.  

TANF Policy will also change the treatment of state income tax refunds to be the same as Federal and exempt them for a period of 12 months from the month of receipt.