N.M. Admin. Code § 8.106.520.12

Current through Register Vol. 35, No. 20, October 22, 2024

Section 8.106.520.12 - EARNED INCOME DEDUCTIONS

A.Earnings deductions: Deductions from gross earned income shall be made in determining the net countable earned income of benefit group members.

(1) Earned income deductions may not exceed the amount of an individual's gross earned income.

(2) The earned income deductions may not be used to reduce unearned income, nor may deductions that are not used by one benefit group member be allocated against the earnings of another benefit group member.

(3) An allowable business expense or cost of producing self-employment income that has been used as a deduction from self-employment income shall not also be allowed as an earned income deduction.

B.Business expenses and self-employment costs: Business expenses and self-employment costs shall be deducted from the gross earnings of a self- employed benefit group member. The income remaining after all allowable business expenses and self-employment costs have been deducted shall be counted as the gross income of the benefit group member. To be eligible for a business or self-employment expense deduction, a Tax ID shall be required.

(1)Allowable expenses and costs: Allowable costs of producing self-employment income include, but are not limited to:

(a) costs of materials and supplies;

(b) business travel, but not personal commuting expenses, calculated at $.25 per mile, unless the self-employed individual can prove that the actual expense is greater;

(c) business taxes, including occupational taxes, gross receipts taxes and property taxes on a place of business other than the home, and business licenses;

(d) rental of equipment, tools and machinery;

(e) rent expense for the place of business, except for the place of business when the individual operates the business out of the individual's residence, unless the individual can demonstrate that the expense has been allowed under federal income tax guidelines;

(f) payments on the principal of the purchase price of income-producing real estate and capital assets, machinery, equipment and other durable goods;

(g) interest paid to purchase income-producing property.

(2)Expenses and costs not allowed:

(a) costs for depreciation, personal business, entertainment expenses and personal transportation to and from work; and

(b) expenses or costs of self-employment that are reimbursed by other agencies cannot also be claimed as costs of self-employment, such as, but not limited to, reimbursements made through USDA to individuals who provide home child care.

(3) Expenses or costs that exceed self-employment income shall not be deducted from other income.

C.Living expense deduction:

(1)Allowing the deduction in the GA-disabled adult program: The living expense deduction is allowed with no time limit as follows:

(a) $125 and one-half of the remainder for a single-adult benefit group;

(b) $225 and one-half of the remainder for a benefit group that includes two adults.

(2)Allowing the deduction in a GA-unrelated child benefit group: The living expense deduction shall be allowed when the caretaker of an unrelated dependent child chooses to be included as a benefit group member. The living expense deduction is allowed with no time limit as follows:

(a) $125 and one-half of the remainder for a single-adult benefit group;

(b) $225 and one-half of the remainder for a benefit group that includes the unrelated caretaker and his or her spouse.

D.Child care costs: Out-of-pocket expenses for child care apply only to the GA-unrelated child benefit group. Expenses paid by the unrelated caretaker for the dependent child included in the benefit group that are necessary due to employment of the caretaker shall be allowed.

(1) From earnings remaining after allowing the work incentive deduction, deduct an amount not to exceed $200 per month for a child under age two and $175 per month for a child age two or older.

(2) If both the caretaker and spouse of the caretaker are working, child care expenses shall be allocated to maximize the available deduction to the benefit group.

(3) The total amount deducted per child shall not exceed the applicable limits set forth above.

N.M. Admin. Code § 8.106.520.12

8.106.520.12 NMAC - N, 7/1/2004, Adopted by New Mexico Register, Volume XXXIV, Issue 20, October 24, 2023, eff. 11/1/2023