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State of Wisconsin |
Release 24-03 |
Other income is any payment that a member receives from sources other than employment that are counted as taxable income. Count the gross payment in the person’s income total.
Count unemployment compensation income, including the amount of unemployment compensation that is intercepted to collect child support. See Section 16.5 Other Income, #23 Certain Payment Types Related to the COVID-19 Pandemic for countable types of pandemic-related unemployment compensation benefits and Section 16.2 Income Types Not Counted, #50 Certain Payment Types Related to the COVID-19 Pandemic for types of pandemic-related benefits that are not counted.
Not all alimony/spousal support is countable income. Do not count alimony/spousal support if it meets one of the following criteria:
If a household is receiving family support, divide the payment by the number of members in the household. The amount of the payment allocated to the child(ren) is considered child support and is disregarded. The amount of the payment allocated to the adult(s) is considered alimony/spousal support. To determine whether alimony/spousal support is counted as income, see Section 16.5 Other Income, #2 Alimony/Spousal Support.
Although a portion of Social Security benefits are usually not taxable, they all must be counted as unearned income. Count Social Security benefits as unearned income in the month received.
The following is a list of some of the codes that should be used in coding Social Security income types:
| Note |
Social Security benefits are not considered when determining if a person is “expected to be required” to file a tax return for the current year (see Section 2.8 Modified Adjusted Gross Income Counting Rules). |
Count income from a bequest, devise, or inheritance in the month it is received.
Count income generated from property given to a trust if the income is paid, credited, or distributed to the person.
| Example 1 |
Keisha is the beneficiary of a trust. Land was given to the trust, and it generates interest that is distributed to Keisha as the beneficiary. Count the interest as unearned income, but do not count the value of the land or the trust. |
Count only the portion of monthly payments received that are considered interest from a land contract as unearned income. Deduct from the gross countable interest any expenses the person is required to pay by the terms of the contract. Do not count the principal as income (because it is the conversion of one asset form to another).
If the income is received monthly, budget it monthly. If the income is received less often than monthly, prorate the income to a monthly amount. Do not begin budgeting this monthly amount until the person first receives a payment after becoming eligible.
| Example 2 |
Bob receives land contract payments from Farmer Brown twice a year: one $5,000 payment in March and another $5,000 payment in September. Ten percent of that payment is interest. When Bob applies for BadgerCare Plus in February, prorate the interest portion of the land contract payments Bob receives after he becomes eligible. In March, when Bob receives a $5,000 land contract payment, divide the total countable income ($5,000 multiplied by 10% equals $500 of countable interest income) by the frequency of the payments (six months) to get the budgeted income amount of $83.33 per month. Begin budgeting this amount in March. |
If a BadgerCare Plus applicant or member makes a loan (except a land contract), count only the portion of the repayment to that applicant or member that is interest. Count the interest as income in the month received.
Count profit sharing income as unearned income in the month received. Tax-deferred contributions made to a profit-sharing plan are not taxable and are not counted as income.
Retirement benefits include work-related plans for providing income when employment ends (for example, pension disability or retirement plans administered by an employer or union).
Other examples of retirement funds include accounts owned by the individual, such as IRAs and plans for self-employed individuals, sometimes referred to as KEOGH plans.
Count the taxable portion of any retirement distribution as income.
Sick pay refers to any amounts paid to an employee for any period during which the employee is temporarily absent from work because of injury, sickness, or disability. This includes short-term disability payments and long-term disability payments. Sick pay does not include payments for medical and hospitalization expenses. It also does not include retirement benefits for someone who has retired because of a disability.
The pay a person receives from an employer while the person is sick or injured is counted as income.
If a person receives sick pay benefits from an insurance policy and the person paid the premiums on the insurance policy, the benefits the individual receives are not counted as income.
If a person receives sick pay benefits from an insurance policy and both the person and the employer paid the premiums on the insurance policy, only the benefits the person receives that are due to the employer’s payments are counted as income.
If a person receives sick pay benefits through a cafeteria plan and the amount of the premiums was not included in the person’s income, the benefits the person receives are counted as income. If a person receives sick pay benefits through a cafeteria plan and the amount of the premiums was included in the person’s income, the benefits the person receives are not counted as income.
Do not count the following:
A trust is any arrangement in which a person (the "grantor”) transfers property to another person with the intention that that person (the "trustee”) hold, manage, or administer the property for the benefit of the grantor or of someone designated by the grantor (the "beneficiary”).
The term "trust” includes any legal instrument or device or arrangement which, even though not called a trust under state law, has the same attributes as a trust. That is, the grantor transfers property to the trustee, and the grantor's intention is that the trustee holds, manages, or administers the property for the benefit of the grantor or of the beneficiary.
The grantor can be:
All regular payments, including dividends and interest, made under the terms of the trust from a trust to the beneficiary are unearned income to the beneficiary. Dividends and interest income are counted even if they are tax exempt.
Count gambling winnings that are regular and predictable as income. Gambling losses cannot be used to offset other types of income.
See Section 16.4.3 Self-Employment Income.
Capital gains are profits from the sale of assets, such as stocks and bonds, real estate, collectibles, or personal items. If personal capital gains are regular and predictable, count as unearned income. Do not count personal capital gains as unearned income if they are not regular or predictable. Personal capital losses can be used to offset the person’s other income types. In situations where a person is planning to file a joint tax return with their spouse, personal capital losses may offset the spouse’s income.
| Note |
If a person is in the business of buying and reselling items, it should be reported as self-employment. |
| Example 3 | Danielle is moving to a different city in Wisconsin. She sold her house and made a profit. This house was her primary residence, and she did not sell it as part of a real estate business. The profit she made from the sale is taxed as capital gains. Since the sale of her house was a one-time event, and the capital gains from the sale are not regular and predictable, these capital gains are not counted as unearned income. |
Work study income and any income from an internship or assistantship should be counted as earned income.
Grants, scholarships, fellowships, and any additional financial assistance provided by public or private organizations that exceed the cost of tuition, books, and mandatory fees are counted as unearned income and should be prorated over the period of time they are intended to cover.
Types of grants, scholarships, and fellowships counted as income include the following:
The following expense types can be used to offset income from grants, scholarships, fellowships, and other financial aid:
The following expense types are not allowed to offset income from grants, scholarships, or other financial aid:
| Example 4 |
Mary was awarded a scholarship for $3,500 in July that is intended to cover her fall semester (September through December). Her tuition and course-related expenses are $3,250 for the semester. The $250 that exceeds the amount of tuition and course-related expenses will be prorated over the four-month period from September through December at $62.50 in unearned income each month ($250/4 months = $62.50/month). |
The following educational aid types are not counted as income and cannot be considered when determining if grants, scholarships, and fellowships exceed the cost of tuition, books, and mandatory fees:
| Note |
When an applicant or member is enrolled in job-related classes or training and the tuition is reimbursed by the applicant's or member’s employer, this may be considered reimbursement for job- or training-related expenses (as defined in Section 16.2 Income Types Not Counted). As long as the reimbursement is not more than the cost of the class or training, it does not need to be budgeted as educational aid. |
Count all jury duty payments as earned income for the month in which they are received if the payments are not turned over to the person’s employer. Amounts received separately as reimbursements or allowances for travel to and from the courthouse, meals, and lodging during jury duty are not countable.
Interest and dividend income is counted as unearned income.
Count lump sum payments (if the payment is otherwise a countable income type) in the month received. Lump sum payments are not counted outside the month received.
Examples of reimbursements that are counted as income:
For examples of reimbursements that are not counted as income, see Section 16.2 Income Types Not Counted, #19 Reimbursements.
All of the income from Tribal Per Capita payments from gaming revenue is counted income.
REWARD Wisconsin stipends are counted income. These stipends are awarded to child care professionals.
There is no uniform policy for how to count payment types related to the COVID-19 pandemic; some payment types are counted as income for BadgerCare Plus and some payment types are not counted as income for BadgerCare Plus. The criteria used to evaluate whether a payment type is counted as income include:
The payment types that count as income for BadgerCare Plus include but are not limited to:
See Section 16.2 Income Types Not Counted, #50 Certain Payment Types Related to the COVID-19 Pandemic for non-countable types of pandemic-related unemployment compensation benefits.
Virtual currency is counted as income when it is received in the following situations:
If virtual currency is sold, income received from the sale is counted as income for BadgerCare Plus only if the income is regular and predictable or if the sale occurs as part of a trade or business.
Although a portion of Railroad Retirement benefits are usually not taxable, they all must be counted as unearned income. Count all Railroad Retirement benefits as unearned income in the month received.
Count cash prizes and awards. If the prize of award is in the form of a good or service, count the fair market value of the prize of award.
Count imputed income. Imputed income is noncash taxable compensation that is included in an employee's gross pay.
| Example 5 | According to Olga’s paystub, her employer pays the cost of her long-term disability insurance premium. The value of this compensation is imputed income. Imputed income equal to the amount of the premium is added to Olga’s earnings before taxes are taken out. This imputed income is countable income for BadgerCare Plus. |
Count benefits paid by a union, such as a strike or lockout benefits, as income.
| Note | Strike benefits are usually taxable compensation, even if taxes are not withheld from the payments upfront. Strike benefits can only be disregarded for BadgerCare Plus if it is clear that the union intended them as gifts. |
Count restricted stock contributions as income only after the stock has been substantially vested.
This page last updated in Release Number: 24-03
Release Date: 12/18/2024
Effective Date: 12/18/2024
The information concerning the BadgerCare Plus program provided in this handbook release is published in accordance with: Titles XI, XIX and XXI of the Social Security Act; Parts 430 through 481 of Title 42 of the Code of Federal Regulations; Chapter 49 of the Wisconsin Statutes; and Chapters HA 3, DHS 2 and 101 through 109 of the Wisconsin Administrative Code.
Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.
Publication Number: P-10171