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Wisconsin Department of Children and Families Wisconsin Works (W-2) Manual |
3.3.4.1 Homestead
3.3.4.2 Vehicles
3.3.4.3 Other Assets
3.3.4.4 Individual Development Accounts
3.3.4.5
Federal Income Tax Refunds
The equity value of all assets not specifically disregarded must be counted.
EXAMPLE: Susan owns a coin collection worth $5,000. She also has a legal debt against the collection in the amount of $3,000. In this case, $2,000 shall be counted as an asset.
The value of the W-2 Group’s primary home serving as the homestead for the W-2 Group shall be excluded as an asset when the home is valued at 200% of the statewide median value or less.
FEPs shall count any home valued at more than 200% of the statewide median home value as an asset.
The home should be disregarded as an asset, regardless of home value, when any of the following hardship criteria are met:
No member of the W-2 group has the legal right to sell the home.
EXAMPLES:
The home is subject to pending legal process(es);
The home is jointly owned with a person not in the W-2 Group and does not consent to selling their share;
The W-2 Group had a recent sudden loss of income due to death, divorce, separation, or non-payment of support;
The W-2 Group includes an incapacitated group member; or
The W-2 Group is or has been subject to domestic abuse or is at risk of further domestic abuse; or if the home is jointly owned with the abuser, and the abuser is not a member of the W-2 Group.
FEPs shall determine the W-2 Group’s home value using a reliable source, such as:
Home value produced from an appraisal, realtor, or a recent final sale value; and
Online valuation tools, such as Zillow, or Real Estate Maximums, RE/MAX.
FEPs shall compare the W-2 Group’s home value to 200% of the previous year’s year-to-date statewide median home price, as reported by the Wisconsin Realtor Association’s (WRA) Wisconsin Housing Statistics
The home value shall exclude the value of land used for agricultural purposes.
In urban situations, the homestead usually consists of a house and lot. A home can consist of a house and more than one lot when the lots adjoin one another.
In farm situations, the home consists of the house and buildings together with the total acreage property upon which they are located and which is considered part of the farm. In situations where the land is on both sides of a road, it is still considered a part of the home.
EXAMPLE 1: Carmon is applying to W-2 in August of 2022 and reports being a homeowner. Their FEP finds that Carmon does not meet any of the home value hardship criteria and enters Carmon’s home address into Zillow which reports the home is valued at $350,000. Carmon’s FEP cross references the Wisconsin Realtor Association’s data for median home price using the 2021 year-to-date data, which is $240,000. 200% of the 2021 median home value is $240,000 x 2 = $480,000. Since Carmon’s home is valued at less than 200% of the statewide median home value, their home is disregarded as an asset.
EXAMPLE 2: Alex is applying to W-2 in August of 2022 and reports being a homeowner. During application, Alex self-reports escaping a domestic violence situation to their FEP. Regardless of the value of Alex’s home, the home is disregarded from the asset test due to meeting hardship criteria.
EXAMPLE 3: Zara is applying to W-2 in August of 2022 and reports being a homeowner. Their FEP determines Zara does not meet any of the home value hardship criteria. Zara provides documents from an appraisal she had done a year ago reporting her home is valued at $500,000. Using the year-to-date data for 2021 median home price, 200% of the 2021 median home value is $240,000 x 2 = $480,000 Zara is ineligible for W-2 because her home’s value is greater than 200% of the statewide median home value and does not meet any hardship exemption criteria.
FEPs must disregard the first $10,000 of combined equity value of the W-2 Group’s vehicles. FEPs must count any equity value amount over $10,000 as an asset to be tested against the $2,500 asset limit.
FEPs must not increase a vehicle’s equity value by adding value for low mileage or items such as optional equipment or mobility devices. FEPs may use either of the following sources to verify vehicle value:
· Kelly Blue Book; or
· New and Used Car Prices NADA Guide
EXAMPLE: Chrystal's FEP checks Kelly Blue Book and verifies Chrystal's car has a market value of $6,700. However, Chrystal verifies that there is a lien recorded on the title for an outstanding amount of $4,000. The equity value of the vehicle is $2,700 (6,700 - 4,000 = 2,700).
The vehicles listed below with a ”No” must not be counted in the asset test. (See 3.3.1)
Common Vehicles |
Asset |
Non-motorized Camping Trailer |
No |
Trailer Home |
No |
Moped |
Yes |
Motorized Golf Cart |
Yes |
Motorized Boat |
Yes |
Non-motorized Boat |
No |
Non-motorized, Nonfarm Livestock Trailer |
No |
Junk Car |
Yes |
Airplane |
Yes |
Snowmobile |
Yes |
Motorcycle - any number of wheels |
Yes |
Motorized Riding Garden Mower |
No |
Log-skidder |
No |
Farm Truck, Tractor, or Other Farm Vehicle used directly to produce income |
No |
Farm Tractor - Nonfarm Use |
Yes |
Household and personal effects are exempt unless they are of unusual value.
IDAs are funded by the Office of Community Services under the Assets for Independence Act (AFIA).
IDAs are designed to help individuals and families with low-income accumulate assets and build financial stability. In an IDA program, an eligible individual signs a savings agreement with a participating agency to save earned income for a specified purpose. The participant's savings are put in a segregated bank account and matched with program funds. The savings and match can only be withdrawn and used for purposes specified in the program.
The match funds reserved for a participant in an IDA account, and the accrued interest for the participant's savings and the match, are not available to the participant and, therefore, are disregarded as assets for W-2 eligibility.
If a W-2 agency uses AFIA funds to establish IDAs, the participant's savings in those IDAs are disregarded as an asset for W-2 eligibility.
The agency must disregard as an asset the entire amount of any federal tax refund for a period of 12 months from the date of receipt. The federal tax refund is considered disregarded income in the month received. (See 3.2.8.1)
If a case is failing for exceeding the countable asset limit, the W-2 agency must ask the individual if they have received a federal tax return in the previous 12 months.
The W-2 agency must take the following steps if the individual reports a federal tax return:
1. Subtract the federal tax return amount from the amount of the individual’s existing countable assets, enter the corrected amount into CWW, and run eligibility;
2. Enter a case comment explaining the adjustment to countable assets;
3. Verify the tax return amount (see 4.1.3); and
4. Scan any relevant documents into ECF.
If the W-2 agency subtracts the federal tax refund from multiple countable assets, W-2 agencies must specify in case comments the amount of the federal tax refund that was disregarded from each countable asset.
EXAMPLE 1 - APPLICANT
On April 2, 2011 Jackie applies for W-2. She provides a bank statement indicating she has a checking account with a $3,000 balance.
The FEP must take the following actions:
· Enter the $3,000 checking account into CWW;
· Complete the driver flow; and
· Run eligibility.
The CWW Eligibility Run Results page indicates that Jackie failed W-2 eligibility with a 024 reason code (countable assets are over program limits). Because Jackie failed W-2 eligibility for exceeding the asset limit, the FEP must ask Jackie if she received any state or federal income tax refunds in the past 12 months. Jackie tells the FEP that in February she received both a $1,000 state income tax refund and a $2,000 federal income tax refund, but she doesn’t have verification with her.
The FEP must take the following actions:
1. Subtract the $2000 federal tax refund from the CWW checking account entry;
2. Change the verification for the asset Type and Asset Amount to ? – NOT YET VERIFIED;
3. Request Jackie to provide verification of her federal tax refund amount, and the date she received it;
4. Enter a case comment indicating the amount and reason for the subtraction; and
5. Run eligibility.
Note: the FEP does not need to take any action on the state refund because Jackie received it two months ago and state EITC payments are only disregarded as income and assets the month they are received.
Jackie returns the following week with verification that she received a $2,000 federal tax refund on February 15.
The FEP must take the following actions:
1. Change the verification for the Asset Type and Asset Amount to indicate the type of verification Jackie provided; and
2. Run eligibility.
EXAMPLE 2 - ONGOING CASE
On April 10, Laticia calls to report she just received a $1,000 federal income tax refund and a $430 state income tax refund. The state income tax refund is the result of the state EITC. Both the full federal income tax refund and the state income tax return that is the result of the EITC are disregarded as income in the month received.
The FEP must take the following actions:
1. Enter a case comment in CWW identifying:
a. the amount of the tax refunds,
b. the dates Laticia received them; and
c. information on why the tax refunds were disregarded.
2. Follow the appropriate income tax disregard policy if Laticia fails W-2 eligibility for exceeding the asset limit in subsequent months.
History: Release 23-07; Release 22-07; Release 20-03; Release 13-02; Release 11-02.