Deductions
(Rules on allowable deductions from income)

As of October 2007, effective through September 2008

Gross income means a household's total, non-excluded income, before any deductions have been made. Net income means gross income minus allowable deductions.

• A 20-percent deduction from earned income 

• A standard deduction of $134 for most households (higher for larger households, and in Alaska, Hawaii and Guam)

• A dependent care deduction when needed for work, training, or education--but not more than $200 for each child under age 2 and not more than $175 for each other dependent 

• Medical expenses for elderly or disabled members which are more than $35 for the month if they are not paid by insurance or someone else 

• Legally owed child support payments 

• Excess shelter costs that are more than half of the household's income after the other deductions. Allowable costs include the cost of fuel to heat and cook with, electricity, water, the basic fee for one telephone, rent or mortgage payments and taxes on the home. The amount of the shelter deduction cannot be more than $431 unless one person in the household is elderly or disabled. (The limit is higher in Alaska, Hawaii and Guam.) 

Last modified: 02/01/2008