The federal government grant is the largest component of your income, after housing. It is based on your salary. Your federal grant amount is based on the following rules:
Your federal grant is based on the number of years the federal government has offered you the program.
Your federal grant is based on the average wage for full-time workers age 20-24 for the year the federal government was in control of the program.
Your federal grant is not tied to any specific occupation. So, the amount of your federal government grant is based on the lowest you can manage based on job experience.
What are some important guidelines for figuring income?
If your federal grant is adjusted to the highest of 3 different wage rates, and your gross income is $55,000, the adjusted amount is $58,000.
Adjusted amount = Average wage rate in the federal government grants + federal funds + state funds.
Adjusted income is not the same as your taxable income.
When determining your adjusted income, see the IRS guidelines on adjusting adjusted gross income to zero if you are the parent, spouse, or dependent of an employee covered by the Social Security Administration.
I had to pay taxes in other years. How do I determine where I earned your income?
Your federal tax return and the amount of your federal grant or other income is the same as your adjusted gross income. You can figure income with the following formula:
Your adjusted income is the lowest of the four levels you can use when determining your income.
Your adjusted income is the only factor affecting total income, not your other federal income.
Your family size is not considered in determining adjusted income. If your family size is larger than what is required, you may have to use your adjusted gross income.
My employer offers tax deductions or a credit. How does this affect my income calculation?
There are different types of tax deductions and credits that may affect your income amount. The employer tax deduction is the largest form of income to include when calculating your income. This includes certain credits such as the child tax credit.
A credit is a tax deduction paid to another person or to an employer. A credit is given to you on your return.
If you have a taxable income, you will see how much of that money is a credit. This amount is the amount of tax you’ll owe, minus your refundable tax credit.
Some states will allow you to
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