Income is verified by self-attestation. Self-attested income that is countable within the MAGI budget must be confirmed, see 1805.030.20.05 Income Included Under MAGI.
Confirmation of Self-Attested Income
Electronic data source income information should be used first to confirm the income whenever possible.
For self-attested income to be considered confirmed, the income should meet criteria in one of the following bullets. Apply the following order when confirming income.
- Self-attested income and the electronic data source income are reasonably compatible, see 1805.030.15 Reasonable Compatibility; OR
- If the self-attested income is not reasonably compatible, the individual should provide a clarifying statement that reasonably explains the difference between self-attested income and the electronic data source income information; OR
- When the income is not reasonably compatible and a reasonable explanation is not given, income documentation should be requested.
Electronic Data Sources
If information is available from the electronic data sources the agency must obtain the electronic data information before attempting to confirm the income any other way (i.e. clarifying statement, or income documentation).
Available electronic data sources must be used in the following order prior to requesting clarification or income documentation from the individual.
- The Federal Data Hub (Federal level information from the IRS.),
NOTE: The individual must give the FSD permission to access the Federal Data Hub. This is usually done on the filer consent when the individual signs the paper application or when the individual submits an online application. The permission is given to the FSD to access Federal Data Hub information for a period of time, 0 to 5 years, as determined by the individual.
NOTE: IRS information received from the Federal Data Hub cannot be printed, saved or stored. The information can only be viewed.
- The Work Number (State level information from Equifax.),
- The Federal Data Hub (Federal level information from the IRS.),
NOTE: When determining current and ongoing eligibility, the Work Number is used as an electronic data source. If the self-attested amount is not Reasonably Compatible (RC) with the electronic data sources (including The Work Number), clarification of income should be requested.
When determining eligibility in Prior Quarter (PQ) months, information provided by The Work Number can be used as income verification.
- IMES or IIVE (Provides state level information from DOLIR.),
- Quarterly Wage Matches/New Hire Matches (State level information from DOLIR.), andNOTE: New Hire Matches and Quarterly Wage Matches can only be used as income verification if the participant has reported the source of income, and the information is reasonably compatible.
- Income verified for any other FSD program within the last twelve (12) months.
Store the electronic data source income information (excluding IRS information) in the Virtual File Room.
Requesting Income documentation:
When the electronic data source and reasonable statement request fails, it is appropriate to requested income documentation. Only request documentation of self-attested income when:
- The electronic data source information is insufficient and cannot be used to confirm self-attested income; OR
- The electronic data source returns an error and cannot be used to confirm self-attested income; OR
- The electronic data source information is inconsistent with the self-attested income or the income is not reasonably compatible.
- The individual fails to provide a statement that reasonably explains the difference between the self-attested income and the electronic data source income information; OR
- The individual’s explanation of the difference between the self-attested income and the electronic data source income information is not considered a reasonable explanation.
Request the previous 30 days of pay history. If the previous 30 days does not accurately reflect a projection of ongoing income request further pay history to accurately project income. See MAGI Policy Manual, 1805.030.25.05 Projection of Income.
NOTE: Pay history from the past 30 days may not accurately reflect a projection of ongoing income when the individual is a seasonal worker, income includes overtime, the individual was on leave without pay, the individual started or stopped a job, etc.
Employer or Income Source Discrepancies
If the individual has not reported an employer or income source, and the electronic data source has information of an employer or income source, contact the participant for clarification.
When self-attestation of an employer or income source is different than what is received from the electronic data source or different from information in our records, determine if the sources and income are compatible.
NOTE: If our records indicate a different employer/income source than what is self-attested, do not request verification that the income source in our records has ended unless it is questionable or not compatible. End the income source in our records based on self-attestation.
The sources are considered compatible when; income from both meets the guidelines for Reasonable Compatibility, and the employer or income sources are similar. If the sources and income are compatible accept self-attestation, if they are not compatible request clarification.
EXAMPLE: James reports he works at Wal-Mart and earns $8.25 per hour and works 32 hours per week. James’ self-attested income would be equal to $1,143.65 per month (32 x 2 = 64 x $8.25 = $528.00 x 2.166 = $1,143.65/month). With James’ income and household size he falls within MHK category of 148% of the FPL. The electronic data source income shows James is employed at Target and earns $900 per month, which is within the MHK category as well. The income sources and income amounts are similar therefore no further information is needed.
Income of individuals or households attesting zero income must be confirmed. Treat self-attestation of no income the same as self-attestation of income.
When zero income is attested and:
- The electronic data source income shows zero income.
- The income is reasonably compatible, not further clarification is needed.
- The electronic data source shows income.
- Request a clarification that reasonably explains the difference between attested income and the electronic data source income.
When income is attested and:
- The electronic data source shows zero or no income.
- Request a clarification that reasonably explains the difference between the attested income and the electronic data source income.
When self-employment income is reported, verification of the income will be requested from the participant unless verification is provided with the request for benefits. For the purposes of verifying self-employment, if the participant did not hold his/her employment in the previous tax year for the entire year use the last three month of business ledgers as verification. When the employment was held for the entire tax year use tax documents (all schedules) as verification. If a tax return is requested from the participant, request all schedules as certain schedules verify income while other schedules verify deductions (i.e. deductible part of self-employment tax).
Self-employment income is commonly found on Schedule C (business income), Schedule F (farming income), and Schedule E (partnerships/S corporations); see figure 1 below.
Figure 1 Schedule 1
Self-employment deductions are commonly found on Schedule 1 (see figure 2 below) and certain deductions are detailed on an additional schedule. For example, the deductible part of the self-employment tax is detailed on Schedule SE.
Figure 2 Schedule 1
The IRS schedules (1-6) for form 1040 summarizes the other schedules that detail income, losses, and deductions; for example, Schedule SE or Schedule C. An individual’s complete tax documents from the most recent tax year are considered the individual’s self-attestation and the verification of income. Complete tax documents trump information returned by an EOI when there are discrepancies. Use the complete tax documents as verified income evidence.
EXAMPLE: Sue is self-employed and provided her complete tax documents from the most recent tax year with her application. Her tax documents are used as Sue’s attestation and verification of her income. With her tax documents/self-attestation, her income is below the eligibility threshold for MHK (148% of FPL). Outcome: Based on her self-attestation, Sue is MHK eligible. RC does not need to be explored as the tax documents are considered verified and reflect information more recent than the EOI.