603.03 Employment Expense Disregard SR 97-05, 01/97 (AAM-A)

Allow the employment expense disregard (EED) for each individual in the assistance group who has countable earned income.

The EED is the second subtraction from an individual’s gross earned income. Subtract the EED after subtracting the earned income disregard.

Exceptions:

• Do not allow EED’s for APTD cases.

• Do not allow EED’s for individuals requesting HCBC-DD MA - Only.

For individuals requesting nursing facility care or HCBC-ECI MA - Only, the EED is the first subtraction from the individual’s gross earned income because these individuals are not entitled to the earned income disregard. See Section 603.01, Earned Income Disregard.

The amount of the EED is either:

• a flat rate of $18.00 per month, or

• actual expenses if they are more than $18.00 per month.

Use the following chart for individuals claiming actual expenses. The chart lists all of the employment related expenses and the maximum amount that can be allowed.

Allowable Expenses	Maximum Amount Allowed The maximum is the amount remaining after reimbursement or other payments
Social Security Taxes (FICA) Use the IRS social security employee tax withholding tables or multiply the gross wage by the applicable percentage.	1996 = 7.65% (15.3% if self-employed) of the first $62,700 of gross annual earned income. The Medicare portion of the above tax rate is 1.45% (2.9% if self-employed), and is applied to all gross annual earned income.	1997 = 7.65% (15.3% if self-employed) of the first $65,400 of gross annual earned income. The Medicare portion of the above tax rate is 1.45% (2.9% if self-employed), and is applied to all gross annual earned income.
Federal Withholding Taxes Refer to the Federal Withholding Tax Table (Circular E).	Allow the amount of federal withholding taxes that corresponds to the number of exemptions the individual is legally entitled to claim.
Railroad Retirement Taxes	Allow the actual amount that is deducted from wages for railroad retirement taxes.
Transportation Costs • to and from work, and • for child care if child care is necessary for employment.	Individual must use the least expensive reasonable means of transportation. Allow $.21 per mile times the number of miles usually traveled in a month (less any reimbursements) if the individual: • uses their own vehicle, or • rides in another person’s privately owned vehicle. Allow the amount normally charged the public if public transportation is used.
Child Care Costs	Allow the actual cost paid by the individual for child care (less any reimbursements) if: • child care costs are incurred as a result of employment, and • the individual taking care of the child(ren) is a licensed provider, or • the provider is license-exempt (takes care of three children or less, or any number of children from one family).
Special Clothing	Allow the actual amount paid by the individual for the purchase of uniforms and other unique clothing required for employment and not suitable for normal daily wear (less any reimbursements). If the individual verifies that unusual standards of cleanliness are a condition of employment, use the actual amount paid by the individual for cleaning the uniforms.
Mandatory Union Dues	Allow the minimum amount the individual must contribute for mandatory union dues.
Mandatory Retirement Contributions	Allow the minimum amount the individual must contribute for mandatory retirement.
Other Mandatory Deductions	Allow the minimum amount deducted from wages, provided the deduction is not elective.
Other Approved Expenses	Allow the actual amount of any other mandatory employment-related expense, such as transportation necessary to fulfill duties of employment.