Can you still claim the EITC and collect food stamps? Will claiming the earned income tax credit affect eligibility for food stamps?
The EITC will not count as income for programs like Medicaid, food stamps (SNAP), SSI, cash assistance or public housing. The broad rule is that the refund you receive from the earned income tax credit will not be considered as income/assets by federal assistance programs.This means that all EITC benefits are disregarded as income in the determination of program eligibility and level of benefits. With respect to resources, federal and state EITC payments are an exempt resource for a period of 12 months from the date of receipt.
The Earned Income Tax Credit (EITC) is a financial boost for people working hard to make ends meet. Millions of workers may qualify for the first time this year due to changes in their marital, parental or financial status.
Food Stamps (SNAP) and EITC
Many special rules apply to the EITC, so taxpayers should review the rules carefully, even when paying someone else to prepare their returns. Most people who qualify for the EITC also qualify for free tax preparation through the IRS Free File program, or at a local Volunteer Income Tax Assistant (VITA) site staffed by IRS trained community volunteers.
EITC and Effect on Welfare Benefits
Generally, the EITC has no effect on welfare benefits. In most cases, EITC payments are not used to determine eligibility for Medicaid, Supplemental Security Income (SSI), supplemental nutrition assistance program (food stamps), low-income housing or most Temporary Assistance for Needy Families (TANF) payments. Though unemployment benefits are not earned income, they are taxable income and may affect the amount of EITC. Some people receiving unemployment benefits may not be eligible to receive the earned income tax credit.
The EITC is never counted as income for government programs. But some government programs have asset tests that limit how much money or property families can have (such as money in a checking or savings account) and still be eligible. For most programs, the money from the Earned Income Tax Credit (EITC) is NOT counted as an asset during the month it was received and the following month. After that, the money could affect your eligibility for programs that have asset limits.
Some programs have different rules related to the EITC:
- For Supplemental Security Income (SSI) eligibility, money from the EITC is not counted as an asset for 9 months after you get it.
- For Food Support (Food Stamps) eligibility, money from the EITC is not counted as an asset for 12 months after you get it.
- Money placed in an Individual Development Account (IDA) is never counted toward asset limits.