The purpose of this procedure letter is to inform Title IV-E agencies of the federal tax refund disregard for Title IV-E FCM initial eligibility determinations.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312) was signed into law on December 17, 2010. The law includes a provision that disregards federal tax refunds received after December 31, 2009 as income and as resources for FCM eligibility determinations. The total amount of a federal tax refund received after December 31, 2009, whether the refund is the result of a refundable credit, over-withholding, or both, is disregarded as income in the month received and as a resource for the following 12 months when determining initial Title IV-E eligibility.

To meet compliance with the provision, it is important for Title IV-E agencies to ensure that their eligibility determination process and interview protocols are designed to obtain information about a federal tax refund for all standard filing unit (SFU) members. The amount of any federal tax refund(s) identified should be noted in the comment section of the eligibility determination and documentation should be maintained in the child's FCM file.

Any reported federal tax refund amounts received in the last 12 months by the SFU member after December 31, 2009 shall be manually subtracted from the SFU members income and or resources prior to entering the amount into SACWIS. This disregard only applies to federal income tax and ends on December 31, 2012.

INSTRUCTIONS

The following chart shows what materials should be inserted into the Family, Children and Adult Services Manual (FCASM).