E614 Income of Children and Tax Dependents for MAGI

1)    Counting Income of Children

Mary lives with her daughter, Samantha, age 17 and Samantha’s child, Joy, age 1.

Mary is a tax filer and claims her daughter and granddaughter as dependents.  Mary earns $2,200 per month.  Her daughter Samantha earns $300 per month.  Samantha’s income is expected to be too low to have to file a tax return.

·        Mary’s budget group = Mary, Samantha, and Joy.  Samantha’s income is below the tax filing threshold, she is Mary’s child, and they are both in the budget group. Since all three conditions are met, Samantha’s income is not counted in Mary’s budget.  Total monthly income counted is $2,200 (Mary’s monthly income).

·        Samantha’s budget group = Mary, Samantha, and Joy.  Samantha’s income is below the tax filing threshold, she is Mary’s child, and they are both in the budget group.  , Since all three conditions are met, Samantha’s income is not counted in her own budget. Total monthly income counted is $2,200 (Mary’s monthly income).

·        Joy’s budget group = Samantha and Joy.  Samantha’s income is still below the tax filing threshold, and she is under 19, but her parent (Mary) is not part of Joy’s budget group.  So, Samantha’s income is counted in Joy’s budget. Total monthly income counted is $300 (Samantha’s monthly income).

2)    Counting Income of Tax Dependents

Allyson (42), is a tax filer and claims her mother June (63), as a tax dependent.

Allyson makes about $1,300 a month from her job while June’s income is $200 a month from her part-time job.  June’s income is expected to be too low to have to file a tax return.

·        Allyson’s budget group = Allyson and June.  June is Allyson’s tax dependent, her income is below the tax filing threshold, and they are both in the budget group. Since all three conditions are met, June’s income is not counted in Allyson’s budget.  Total monthly income counted is $1,300.

·        June’s budget group = June.  June is Allyson’s tax dependent, her income is still below the tax filing threshold, but Allyson is not part of June’s budget group. June's income is counted in her own budget. Total monthly income counted is $200.