MEMORANDUM

DISCUSSION:

Effective July 13, 2009, income expense code MN – Meals/Entertainment – outside the home for EU Member is added to FAMIS, and the Definition of income expense code ML – Meals/Entertainment – cost of doing business has been clarified.

Income expenses are entered on the Income Expense (FMX1) screen in FAMIS. Staff must enter all self-employment expenses in FAMIS. Do not combine the expenses. Each expense must be entered individually so FAMIS can make a correct determination for each program. FAMIS determines whether the income expense ML or MN is included or excluded for Child Care, Temporary Assistance, MO HealthNet, and Food Stamp Programs.

Use the expense code ML or MN depending upon whether the expense is for the EU Member or another person related to the business.

The income expense code ML, Meals/Entertainment has been clarified to mean the cost of doing business. Child care providers claim these expenses for meals provided to children in care. A self-employed real estate agent claims these expenses for meals provided for potential customers. The expense code ML is an allowable income expense for all programs in FAMIS.

The code MN, Meals/Entertainment, outside the home for an EU Member, is added to FAMIS. Use the code MN to exclude expenses for an EU Member. Any costs for meals of the real estate agent must be coded MN and is an excluded income expense. The expense code MN is not an allowable expense for any program in FAMIS.

EXAMPLE: Mrs. Apple has applied for Food Stamp benefits. Mr. Apple is a self-employed graphic artist. The Apple's tax return has an expense amount of $2400.00 for meals. The eligibility specialist reviews the tax return with Mrs. Apple. It is determined that $1000.00 of the listed expense is for meals consumed by Mr. Apple.

The expenses are entered into FAMIS follows.

FAMIS allows the $1400.00 (code ML) as an expense of producing income. FAMIS excludes the $1000.00 (code MN) as an expense of producing income because the cost is for Mr. Apple, an EU Member.

Food Stamp Manual sections 1115.040.25 Expenses of Producing Self-employment Income and 1115.040.30 Non-Expenses of Producing Self-employment Income are updated to include income expense code MN –Meals/Entertainment – outside the home for EU Member, and clarify the use of ML – Meals/Entertainment – cost of doing business.

Temporary Assistance Manual section 0210.015.25 Overhead Expense of Producing Income is updated to include income expense code MN –Meals/Entertainment – outside the home for EU Member, and clarify the use of ML – Meals/Entertainment – cost of doing business.

NECESSARY ACTION:

• Review this memorandum with appropriate staff.

JM/RE/LH