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Tax Refunds
State Refunds
The portion of the State tax refund which is a renter's credit payment is considered exempt property. The remaining portion of the State tax refund is considered nonexempt property.
Federal Refunds
The Earned Income Tax Credit (EITC) portion of a federal tax refund is considered exempt property in the month of receipt and for one month following the month of receipt. Any remaining portion of the federal tax refund is considered property.
Note: EITC, whether received as an advance payment or as a tax refund, shall be considered exempt income in the month received.
Verification
The following are acceptable verifications of tax refunds:
- Copy of the refund check
- Statement from IRS
- Copy of client's tax return.
Time Limited Changes to Tax Credits and Refunds
All Federal Income Tax credits and refunds are exempt as income and property for 12 calendar months from the date of receipt. The exclusion refers to any federal tax refund including, but not limited to, Income Tax Refund (ITR), Earned Income Tax Credit (EITC), Child Tax Credit (CTC), Making Work Pay Credit (MWPC), or other tax refunds/credits. These provisions only apply to Federal income tax refunds and credits received between
December 31, 2009 and December 31, 2012.
In addition, penalties cannot be imposed upon Long Term Care applicants for transfer of property (for less than fair market value) of all or part of a refund and/or credit received between December 31, 2009 and December 31, 2012.
Similarly, a refund or credit received between December 31, 2009 and December 31, 2012, and placed in a trust fund, may not be counted as available, and no transfer of asset penalties apply. Funds placed in a trust or disposed of after December 31, 2012, are subject to transfer penalties and counted as available under MC Trust provisions.
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