TO:	Commissioners of Social Services

FROM: Patricia A. Stevens, Deputy Commissioner Division of Temporary Assistance 

SUBJECT:	Temporary Assistance (TA), Medicaid and Food Stamp (FS) Policy Regarding the Treatment of Federal Tax Rebates

EFFECTIVE DATE:  Immediately

CONTACT PERSON: TA Questions: Central Team @1-800-343-8859, extension 4-9344
                                       FS Questions: Eastern Team @1-800-343-8859, extension 3-1469
                                       Medicaid Questions: Bureau of Local District Support
                                       Upstate (518) 474-9130    NYC (212) 268-6855

Starting July 25, 2003, the Internal Revenue Service will begin issuing advance payment checks to taxpayers who claimed the child care tax credit on their 2002 tax return.  The payment is an advance refund of the expanded child tax credit for the 2003 tax year. Taxpayers could receive up to $400 for each qualifying child they claimed on their 2002 return.

Temporary Assistance Implications

Non - Earned Income Tax Credit (EITC) tax returns are countable towards the TA $2,000 (or $3,000) resource limit.  However, since the impact of these tax refunds is expected to be minimal, districts are not required to establish any extraordinary operational procedure to review the eligibility impact on TA cases. Districts must continue to review the financial eligibility of TA cases at the time of any reported changes in resource levels and at a minimum at each recertification.

Districts which choose to follow up earlier than the next scheduled recertification to verify resources may opt to do so under 18 NYCRR 351.2 for TA clients that appear to be eligible for the advanced refund.

Food Stamp Implications

The Food Stamp program treats non-EITC tax refunds as lump sums:  They are exempt as income but are considered a resource in the month received. Food Stamp households are required to report the receipt of a resource if the accumulated value of resources would exceed the household's applicable resource limit.  Households subject to six-month reporting rules are required to report excess resources at the time the periodic report or change report form is due and at recertification. Food Stamp households subject to change reporting rules must report within ten days of receiving the resource.

Medical Assistance Implications

Income tax refunds received by an applicant/recipient (A/R) are disregarded in the month received and considered an exempt resource in the following month.  As such, the impact of these tax returns should be minimal.  Additionally, resources are not considered when determining eligibility for an A/R for Family Health Plus or an A/R under the age of 19 unless the A/R is spending down to the Medically Needy level.