10 Colo. Code Regs. § 2506-1-4.407

Current through Register Vol. 47, No. 22, November 25, 2024

Section 10 CCR 2506-1-4.407 - [Effective 1/4/2025] DEDUCTIONS AND EXCLUSIONS FROM INCOME

A. Allowable deductions are subtracted from total monthly gross income to determine the household's monthly net SNAP income.

Allowable expenses will not be deductible if covered by vendor payments such as HUD, or reimbursements, such as insurance. An expense which is covered by an excluded vendor payment that has been converted to a direct cash payment under a federally authorized demonstration project shall not be deductible.

B. Households may elect to have fluctuating monthly expenses averaged over the certification period. Also, households have the option of having expenses that are billed less often than monthly averaged over the period the expense is intended to cover. Households may elect to have medical expenses averaged as described in Sections 4.407.6 and 4.407.61. Expenses that have been averaged are subject to the reporting requirements contained in Section 4.603.

C. Actual or averaged expenses that result in deductions for medical, dependent care, and shelter costs shall be anticipated. Households who expect changes cannot have their expenses averaged solely on the basis of the last several bills. Expenses that are billed on a weekly or biweekly basis shall be converted to a monthly figure utilizing the conversion outlined in Section 4.402.

D. Legally obligated child support is considered an income exclusion.

E. The following subsections contain the only deductions allowed from a household's monthly income. The deductions are as follows:

1. Standard deduction

2. Earned income deduction

3. Excess shelter deduction

4. Dependent care deduction

5. Excess medical deduction

4.407.1Standard Deduction

A standard deduction of 8.31% of the federal poverty income guidelines for the household size as described in Section 4.401.2 will be used to calculate the amount that is allowed to all households. The established standard amount will be adjusted annually as announced by FNS, USDA. The calculation of 8.31% of the federal poverty income guidelines for eligible members will be used for all households up to the household size of six (6). All households with six (6) or more eligible members will use the six (6) person standard deduction.

Standard Deduction Amount
Household Size	1-3	4	5	6+
Effective October 1, 2024	$204	$217	$254	$291

4.407.2Earned Income Deduction

A. A household with earned income shall receive a deduction of twenty percent (20%) of its gross nonexempt earned income. The twenty percent (20%) deduction shall also apply to prorated income earned by the disqualified member and attributed to the household.

B. The earned income deduction will not be applied to any portion of income earned under a work supplementation or work support program that is attributable to a federal, state, or local public assistance program.

An Inadvertent Household Error (IHE) claim that is due to earned income being reported in an untimely manner will be calculated without allowing the twenty percent (20%) earned income deduction

4.407.3Excess Shelter Deduction

A. Households shall receive a deduction for the allowable monthly shelter costs that are in excess of fifty percent (50%) of the household's income after all other deductions. Shelter expenses are allowed as billed to a household member or as paid or billed to a disqualified individual. Shelter costs that are paid by or billed to a person disqualified for fraud shall be allowed as a deduction for eligible members in their entirety. Shelter costs, paid or billed to a person disqualified for being an ineligible non-citizen or for failure to provide a Social Security Number shall be divided evenly among all household members and the disqualified individual. All except the disqualified person's pro rata share is counted as a shelter cost of the household.

B. A shelter deduction cap, as specified below, applies to households that do not contain a person who is aged sixty (60) and older or a person with a disability as defined in Section 4.000.1. Those households containing a person who is aged sixty (60) and older and/or a person with a disability shall receive an excess shelter deduction for the monthly cost of shelter that exceeds fifty percent (50%) of the household's monthly income after all other applicable deductions.

Shelter Deduction Cap
Effective October 1, 2024	$712

C. Households in which all individuals are experiencing homelessness and are not receiving free shelter throughout the calendar month shall be entitled to use a standard estimate of shelter expenses.

The FNS, USDA, provides an update of this estimated figure annually when the shelter cap for other households is adjusted. The Homeless Shelter Deduction is as follows:

Homeless Shelter Deduction
Effective October 1, 2024	$190.30

All households experiencing homelessness that incur, or reasonably expect to incur, shelter costs during a month shall be eligible for the estimate, unless higher shelter costs are verified, at which point the household may use actual shelter costs rather than the estimate.

Households experiencing homelessness that incur no shelter costs during the month shall not be eligible for the homeless shelter deduction.

If a household experiencing homelessness has difficulty in obtaining traditional types of verification of shelter costs, the eligibility technician shall use the prudent person principle in determining if verification obtained is adequate.

D. A household may claim both the costs of its actual residence and those for a home that is not occupied by the household because of: employment or training away from home; illness; or abandonment caused by a natural disaster or casualty loss.

For costs of a home vacated by the household to be included in the household's shelter costs, the household must intend to return to the home; the current occupants of the home, if any, must not be claiming the shelter costs for SNAP purposes; and the home must not be leased or rented during the absence of the household.

E. Allowable shelter costs shall include only the following:

1. Continuing charges for the shelter, including rent, mortgages, condo, and association fees or other continuing charges leading to the ownership of the shelter such as loan repayments for the purchase of a mobile home, including interest on such payments.

a. If a homeowner has drawn money down in a reverse mortgage and now wants to make monthly payments to repay some of the amount drawn, the repayment shall be considered a charge leading to the ownership of a home, such as a loan repayment. To be deductible, the charge must be continuing. If the household expects to make monthly payments, the client's charges are considered to be continuing, and the repayments shall be allowed as a shelter cost. If the repayment is not continuing, it does not meet the requirement and the payments shall not be allowed as a shelter deduction.

b. Payments on loans secured by a lien placed on the property by the lending institution, such as a second mortgage or home equity loan, shall be considered a continuing charge for shelter. Payments on unsecured loans or personal loans are not considered shelter costs.

c. Expenses incurred to keep a pet that are billed separately from the household's rent are not allowable as shelter deductions.

2. Property taxes, state and local assessments, and insurance on the structure itself, but not separate costs for insuring furniture or personal belongings.

3. Charges to repair or rebuild a home substantially damaged or destroyed due to a natural disaster such as a fire or flood. Allowable expenses are those that have not been, and will not be, reimbursed by private or public relief agencies, insurance companies, or any other source.

4. Utility costs which include charges for heating and cooking fuel; water and sewer; well installation and maintenance; septic tank installation and maintenance; garbage and trash collection fees; and, fees charged by the utility provider for initial installation of the utility.

5. A telephone allowance for one telephone or the cost of telephone service that is associated with a specific device, which includes land-line service or cellular service, including disposable cell phones, and voice over internet protocol (VOIP). Households are not allowed to deduct the cost of pay phones and of phone cards that are not associated with a specific device. One-time deposits shall not be included as shelter costs. With regard to VOIP, only the cost of VOIP is deductible; other charges such as Internet connectivity fees and monthly cable/internet fees are not deductible.

4.407.31Four-Tiered Mandatory Standard Utility Allowance

Effective October 1, 2008, a four-tiered mandatory standard utility allowance deduction was implemented in determining a household's excess shelter deduction. Households cannot claim actual utility expenses and are only entitled to one (1) of the four (4) utility allowances. The four (4) utility allowances shall be reviewed annually and adjusted each year, based on federal approval, to reflect Colorado's cost of utilities. No utility expenses can be allowed as an income exclusion for self-employed households when a mandatory utility allowance is given to the household.

When determining expedited eligibility, the appropriate utility allowance shall be applied when establishing the household's shelter costs.

The four (4) allowances are as follows:

A. Heating and Cooling Utility Allowance (HCUA)

1. "Cooling costs" are defined as utility costs relating to the operation of air conditioning systems, room air conditioners, swamp coolers, or evaporative coolers. Fans are not an allowable cooling cost. A heating and cooling utility allowance (HCUA) is available only to households which:

a. Incur or anticipate heating or cooling costs separate and apart from their rent or mortgage;

b. Received a Low-Income Energy Assistance Program (LEAP) or an Energy Electronic Benefit Transfer (E-EBT) payment within the previous twelve (12) month period, regardless of whether the individual is still residing at the address for which they received the LEAP or E-EBT payment;

c. Live in private rental housing and are billed by their landlords on the basis of individual usage or charged a flat rate separately from their rent for heating and cooling;

d. Share a residence and incur at least a portion of the heating or cooling cost, in which case each household will be entitled to the full HCUA; or,

e. Live in public housing and are responsible for excess heating and/or cooling costs.

2. A SNAP household, which incurs or anticipates heating or cooling costs on an irregular basis, may continue to receive the HCUA between billing periods.

3. Operation of a space heater, electric blanket, heat lamp, cooking stove and the like when used as a supplemental heating source are allowable costs when determining eligibility for the basic utility allowance (BUA), but do not qualify a household for the HCUA.

4. The HCUA standard is as follows:

HCUA Standard
Effective October 1, 2024	$578

B. Basic Utility Allowance (BUA)

1. The Basic Utility Allowance (BUA) is mandated for any households that are not entitled to the HCUA and that incur at least two (2) non-heating or non-cooling utility costs, such as electricity, water, sewer, trash, cooking fuel, or telephone.

2. If more than one SNAP household shares in paying non-heating or non-cooling utility costs of the dwelling, the full BUA will be allowed for each assistance group sharing in the utility costs.

3. The BUA standard is as follows:

BUA Standard
Effective October 1, 2024	$367

C. One Utility Allowance (OUA)

1. The OUA is mandated for any household that is not entitled to the HCUA or BUA but is responsible for only one (1) non-heating or one (1) non-cooling utility expense. The OUA is not allowed if the household's only utility expense is a telephone.

2. If more than one (1) SNAP household shares in paying one (1) non-heating or one (1) non-cooling utility cost of the dwelling, the full OUA will be allowed for each assistance group sharing in the utility cost.

3. The OUA standard is as follows:

OUA Standard
Effective October 1, 2024	$69

D. Telephone allowance

1. The telephone allowance is available to households whose only utility cost is for a telephone. If more than one SNAP household shares in paying the telephone costs and that is the only utility costs of the dwelling, the full phone standard will be allowed for each assistance group sharing in the telephone costs.

2. The telephone allowance is as follows:

Telephone Standard
Effective October 1, 2024	$94

4.407.4Dependent Care Deduction

Refer to Section 4.407.6 if the attendant care is for a household member who is age sixty (60) or older or who receives SSI or Social Security disability payments. The attendant costs, including meals provided, shall be considered as a medical expense.

A. Dependent care expenses, as billed to a household member or as paid by or billed to a person disqualified for being an ineligible non-citizen or failure to provide or apply for a SSN, for the care of a child or dependent with disabilities shall be considered when the dependent care expenses are necessary for a household member to accept or continue employment, seek employment, or attend training or pursue education which is preparatory to employment. Dependent care expenses that are paid by or billed to the disqualified person shall be divided equally among all household members and the disqualified person. All except the disqualified member's pro rata share is considered for a deduction.

The dependent care deduction that is paid by or billed to individuals disqualified for intentional Program violation/fraud will be allowed in its entirety.

Allowable dependent care costs include:

1. The cost of care given by an individual care provider or care facility;

2. Transportation costs to and from the care facility. Mileage expenses must be calculated based on the prevailing Internal Revenue Service (IRS) business rate published annually at https://www.irs.gov/tax-professionals/standard-mileage-rates; and

3. Activity or other fees associated with the care provided to the dependent that are necessary for the household to participate in the care.

B. The total dollar amount that the household is responsible to pay for dependent care expenses is deductible.

C. Only direct monetary payments to an agency or a person outside of the household will be allowable. The value of in-kind benefits paid to an attendant, such as meals, is not considered for a dependent care deduction.

D. A child care expense which is reimbursed or paid for by the JOBS program under Title IV-F of the Social Security Act or the Transitional Child Care (TCC) program shall not be a deductible expense.

4.407.5Child Support Expense Exclusion

A. A household shall receive an exclusion from income for legally binding child support payments made to or for non-household members. The child support exclusion will be made from the household's total countable gross income and prior to any gross income test to determine eligibility. The court-ordered amount and the most recent amounts that have been paid must be verified by the household. Legally obligated child support paid by a household member under the age of eighteen (18) shall be an allowable exclusion, even if the income of the child is considered exempt under Section 4.405, C.

B. If the noncustodial parent makes child support payments to a third party non-household member (e.g., a landlord, utility company, or health insurance organization) in accordance with the support order, the payment shall be included in the child support exclusion.

C. A deduction for amounts paid toward arrearage will be allowed. Alimony payments will not be allowed as an exclusion.

D. Households with a history of three (3) or more months of paying child support shall have the support payments averaged taking into account any anticipated changes in the legal obligation and shall use that average as the household's support exclusion.

E. For households with less than a three (3) month record, the local office shall estimate the anticipated payments and use that estimate as the household's support exclusion.

F. If the household does not report and verify its monthly child support payment or a change in its legal obligation, the child support exclusion shall not be allowed.

4.407.6Excess Medical Deduction

A household shall receive a deduction for total medical expenses more than thirty-five dollars ($35) per month, incurred by any household member(s) who is aged sixty (60) and older or a person with disabilities. Other household members who are not aged sixty (60) and older or a person with disabilities, including spouses and dependents, cannot claim costs of their medical treatment and services.

A. The following medical costs, less the cost of reimbursements from another source, are allowable:

1. Medical and dental care including psychotherapy and rehabilitation services provided by a licensed practitioner or other qualified health professional as defined in 12-200-101 through 12-315-126, C.R.S.

2. Hospitalization or outpatient treatment, nursing care, and nursing home care including payments by the household for an individual who was a household member immediately prior to entering a hospital or nursing home provided by a facility recognized by the Colorado Department of Public Health and Environment.

3. Prescription drugs when prescribed by a licensed practitioner authorized under state law and other over-the-counter medication (including insulin) when approved by a licensed practitioner or other qualified health professional. Costs of medical supplies, sickroom equipment (including rental), or other prescribed equipment may also be allowable.

4. Health and hospitalization insurance policy premiums, Medicare premiums, and any cost-sharing expenses incurred by medical recipients.

5. Dentures, hearing aids, prosthetics, and eyeglasses prescribed by a physician skilled in eye disease or by an optometrist.

6. Securing and maintaining a service animal, such as a seeing eye or hearing dog, including cost of food and veterinarian fees. The costs of caring for these animals may be deducted only when the animal has received special training to provide a service to the client.

7. Reasonable transportation and lodging to obtain medical treatment or services. Mileage expenses shall be calculated based on the prevailing Internal Revenue Service (IRS) commercial mileage rate.

8. Wages to an attendant, homemaker, home health aide, child-care services, or a housekeeper necessary due to age, infirmity, or illness. In addition, an amount equal to the maximum allotment for one (1) person is allowed if the household furnishes the majority of the attendant's meals. The allotment shall be the one in effect at the time of certification with an appropriate adjustment at the next certification.

If attendant care costs qualify under both medical and dependent care deduction, the costs shall be allowed as a medical expense.

In cases when the household claims a deduction for billed medical expenses and the household is unable to verify whether any reimbursement will be received, no medical expense deduction shall be allowed until the household either receives reimbursement for all or part of the expense or is able to verify that reimbursement will not be provided. When such reimbursement is received and/or verified, the non-reimbursed portion of the claimed medical expense is allowed.

B. Non-allowable medical costs include, but are not limited to:

1. Special diet expenses;

2. Premiums for health and accident policies, such as those payable in lump sum settlements for death or dismemberment, or policies for income maintenance such as those that continue mortgage or loan payments while the beneficiary is a person with disabilities;

3. Medical expenses that are reimbursable by insurance or other public or private sources;

4. Medical marijuana;

5. Vitamins and supplements unless prescribed by a physician; and

6. Medical expenses carried forward from past billing periods unless one (1) of the following conditions is met:

a. The amount is being carried forward pending reimbursement information; or,

b. The household has arranged to make monthly installments on the past due bills. The past due amount must be due to missed payments under a previous repayment agreement with the medical provider, and the payment plan is now being renegotiated with the provider. The negotiation of a payment plan with a collection agency will not be accepted as a renegotiated payment plan; or,

c. Households that become categorically eligible for SNAP by reason of becoming a pure SSI household shall be entitled to excess medical expenses for the period for which they are authorized to receive SSI or from the date of the SNAP application, whichever is later. Restored benefits shall be issued if appropriate; or,

d. Medical expenses that occur after the application filing date and reported at the subsequent application for recertification or periodic report shall be considered if the medical expense has not previously been reported and allowed as a medical deduction. If at recertification the household provides previously unreported medical expenses that occurred prior to the last certification period that are past due, the local office shall review the medical expenses under provisions a through c of this subsection.

4.407.61Determining Monthly Medical Expenses

A. A household that contains a member who is eligible for a medical expense deduction is eligible for a deduction using either the Standard Medical Expense Deduction (SMED) or using actual medical expenses. Beginning October 1, 2016, the SMED is one hundred sixty-five dollars ($165).

The SMED is used if the total verified medical expenses are greater than thirty-five dollars ($35) and less than or equal to the SMED. The household may claim actual expenses if the total verified expenses, after deducting the first thirty-five dollars ($35), exceed the SMED.

At ...	Then allow ...	And verify ...
Application, if the household has medical expenses greater than $35 and less than or equal to the SMED,	The SMED,	The household has medical expenses greater than $35. verification must be received to allow the SMED.
Application, if the household has monthly medical expenses greater than the SMED after subtracting the first $35,	Actual medical expenses,	The actual monthly medical expense(s). If the household chooses not to provide verification of expenses exceeding the SMED, then allow the SMED instead of actual expenses. Verification of expenses exceeding $35 must be received to allow the SMED.
Recertification, if: * The household already has actual medical expenses greater than $35 and less than or equal to the SMED, and * There is no change, or there is a change in the amount but the monthly medical expense is still greater than $35 and is less than or equal to the SMED,	The SMED,	No verification is required unless the household's declaration is questionable.
Recertification, if the household does not already have the SMED allowed and the household states an eligible member has medical expenses greater than $35 and less than or equal to the SMED,	The SMED,	The household has medical expenses greater than $35. Verification must be received to allow the SMED.
Recertification, if the household does not already have actual medical expenses budgeted and the household states an eligible member has medical expenses greater than the SMED after subtracting the first $35,	Actual medical expenses,	The actual monthly medical expense(s). If the household chooses not to provide verification of expenses exceeding the SMED, then allow the SMED instead of actual expenses. The household must provide proof of expenses exceeding $35 to receive the SMED.
Recertification, if: * The household has actual medical expenses greater than the SMED already allowed, and * There is a change in the monthly amount of more than twenty-five dollars ($25),	* The SMED if the new total is greater than $35 and less than or equal to the SMED, or * Actual medical expenses if the new total exceeds the SMED after deducting the first $35	The change in medical expenses.

B. Expenses incurred weekly or biweekly shall be converted to a monthly amount using exact dollars and cents and the conversion method outlined in Section 4.402, A. The excess over thirty-five dollars ($35) per month is allowed as a monthly deduction.

C. At the time of application and recertification, the household may elect to have one-time-only costs deducted in one month as a lump sum or averaged over the certification period to obtain a monthly amount. If the household elects to average the expenses over the certification period, the thirty-five dollar ($35) deduction shall be taken for each month of the certification period.

When a one-time-only medical expense is reported during a certification period, the amount may be deducted in a lump sum or averaged over the remainder of the certification period. Averaging would begin the month the change would be effective. If the household elects to average the expenses over the remainder of the certification period, the thirty-five dollar ($35) deduction shall be taken for each remaining month of the certification period.

When averaging the medical expenses, the SMED is allowed for each month of the certification period, as long as the household's allowable averaged monthly medical expense is greater than $35. If the expense recurs monthly or more often, and the medical expense exceeds $35 and is less than or equal to the SMED each month, the SMED is allowed for each month of the certification period. When allowable medical expenses for the household exceed the SMED after deducting the first $35, the actual medical expenses are budgeted. The following chart is used to determine when to allow the SMED or actual medical expenses.

If the expense ...	THEN ALLOW THE ...
Recurs less often than monthly and the amount averaged for each month is less than or equal to $35,	Actual amount of verified actual medical expense in the month billed, or use the SMED in the month billed if the medical expense is greater than $35 and less than or equal to the SMED.
Recurs less often than monthly and the amount averaged for each month is greater than $35 and less than or equal to the SMED each month,	SMED for each month of the certification period.
Recurs less often than monthly and the amount averaged for each month is greater than the SMED,	Averaged amount of actual verified medical expenses for each month. Allow the SMED only if the household chooses to use the SMED or fails to provide enough verification to qualify for actual medical expenses.
Occurs one time and the amount averaged over the certification period is less than or equal to $35 a month,	Actual amount of verified medical expenses in the month billed, or use the SMED in the month billed if the medical expense is greater than $35 and is less than or equal to the SMED.
Occurs one time and the amount averaged over the certification period is greater than $35 and less than or equal to the SMED each month,	SMED for each month of the certification period.
Occurs one time and the amount averaged over the certification period is greater than the SMED each month,	Averaged amount of the actual medical expenses for each month. Allow the SMED only if the household chooses to use the SMED or fails to provide enough verification to qualify for actual medical expenses.

10 CCR 2506-1-4.407

37 CR 15, August 10, 2014, effective 9/1/2014

37 CR 21, November 10,2014, effective 12/1/2014

38 CR 23, December 10, 2015, effective 1/1/2016

39 CR 01, January 10, 2016, effective 2/1/2016

39 CR 05, March 10, 2016, effective 4/1/2016

39 CR 07, April 10, 2016, effective 5/1/2016

39 CR 15, August 10, 2016, effective 9/1/2016

39 CR 17, September 10, 2016, effective 10/1/2016

39 CR 19, October 10, 2016, effective 11/1/2016

39 CR 23, December 10, 2016, effective 1/1/2017

40 CR 11, June 10, 2017, effective 7/1/2017

40 CR 17, September 10, 2017, effective 10/1/2017

41 CR 15, August 10, 2018, effective 9/1/2018

40 CR 23, December 10, 2017, effective 12/30/2018

42 CR 01, January 10, 2019, effective 2/1/2019

42 CR 03, February 10, 2019, effective 3/15/2019

42 CR 17, September 10, 2019, effective 10/1/2019

42 CR 18, October 10, 2019, effective 10/1/2019

42 CR 23, December 10, 2019, effective 12/30/2019

43 CR 01, January 10, 2020, effective 1/30/2020

43 CR 05, March 10, 2020, effective 2/7/2020

43 CR 07, April 10, 2020, effective 4/30/2020

43 CR 21, November 10, 2020, effective 11/30/2020

44 CR 21, November 10, 2021, effective 11/30/2021

45 CR 05, March 10, 2022, effective 3/30/2022

45 CR 19, October 10, 2022, effective 10/1/2022

45 CR 19, October 10, 2022, effective 11/1/2022

45 CR 21, November 10, 2022, effective 11/30/2022

46 CR 17, September 10, 2023, effective 9/30/2023

46 CR 19, October 10, 2023, effective 10/1/2023 exp. 1/6/2024 (Emergency)

46 CR 21, November 10, 2023, effective 11/30/2023

47 CR 15, August 10, 2024, effective 8/30/2024

47 CR 19, October 10, 2024, effective 10/1/2024, exp. 1/4/2025 (Emergency)

47 CR 21, November 10, 2024, effective 11/30/2024