Will SNAP/California Food stamps send my income data to the IRS?
August 16, 2016 2:39 AM   Subscribe

I live in California. I want to apply for food stamps. I do not want to, and will not, lie to the food stamps people. However, I make about $250/month in cash (in addition to my part-time minimum-wage job for which I get a W-2) that I do not report to IRS because then I will have to pay self-employment tax on it and fill out a bunch of forms for what is really just a friend paying me to help them out for maybe 12 hours a month. If I tell the food stamps people about this monthly cash income, will they share that information with the IRS? So far I have been dealing with this by just not applying for food stamps, and with careful spending I am OK, but as I notice myself obsessing over tiny things in the grocery store this starts to feel ridiculous.
posted by anonymous to Law & Government (10 answers total)
Don't report to either. $250 a month isn't enough to sway your base needs. But reporting it could affect your food stamp disbursement and will probably add a great deal of fuss and paperwork.

Social service types are overworked and underpaid. Most really, really don't give a damn as long as you're using the stamps for what they're intended: food. In my experience, it's unlikely the two bureaucracies will compare notes. If you're asking, "Is there an automated system that trades information and flags inconsistencies?" the answer so far is NO. If you don't have a criminal or heavy debt record I doubt you'll be scrutinized.

I wouldn't feel too bad about this one. Food stamps are one of the most efficient social programs in terms of return on investment and boon to local economies. The recent cuts and added stipulations are a shot in the foot. Do you need the stamps? Lie and apply. We're all stuck in this shitty capitalist system together. The least you can do is eat.
posted by fritillary at 4:00 AM on August 16, 2016 [28 favorites]

Agreed. Don't report it.

It's not stable income by any metric, it is complicated to report, it is too complicated.

You need assistance. Not hassles. This is not the kind of fraud the system is looking to avoid. Please, take care of yourself without any guilt!!!

Also. You might want this book from the library. I also recommend a book called Perfectly Legal about how IRS legal loopholes are regularly exploited, perhaps that will convince you this is not that?

I'm so sad I have to try and convince you not to feel guilty and if I go too far, the mods will delete this. Your $250 is not that thing. Please take care of yourself.
posted by jbenben at 4:57 AM on August 16, 2016 [5 favorites]

Former welfare employee here, albeit in a different state (Pennsylvania).

Report it. Because of unfounded fears that every needy person is secretly committing grand larceny with the welfare system, every state is hyperparanoid about welfare fraud. If you're discovered to have unreported income, you will be in deep, deep shit. Not in a "you're going to jail" sense, but in a "kiss your SNAP benefits goodbye" sense. I would not risk it.

Now, whether welfare will pass that data along to the IRS? I wouldn't worry about that part. I handled a ton of applications where people were paid under the table for sweeping up at hair salons, caretaking of children and the elderly, and even construction. People were often honest and put that income forward for our calculations. If the IRS were looking at it, that would be news to me. On top of that, $250/mo comes out to $3000 a year, well under the, IIRC, $6000 a year minimum you need to have to pay tax.
posted by SansPoint at 5:23 AM on August 16, 2016 [8 favorites]

SansPoint :

How exactly are they going to find out about $250 in cash? I'm not being snarky, I'd like to know. Do they follow your around in hopes of catching you at your under the table paid job?
posted by james33 at 5:42 AM on August 16, 2016 [2 favorites]

People are often jerks to those receiving benefits. My coworker in Human Resources gets a lot of phone calls meant for Human Services that are people attempting to report fraud like somebody making money from babysitting or buying a magazine after they swiped their EBT card. I hope they never know what it's like to go hungry, but yeah, I'd report it too because you don't want it to screw up future ability to get benefits.
posted by notjustthefish at 5:49 AM on August 16, 2016 [2 favorites]

Another PA caseworker here. I agree with Sans Point, report the cash income so you can receive the SNAP you're entitled to. Here n PA, the Department of Human Services is a non-reporting agency, so while we receive income data from Equifax and the IRS, we don't report out. The CalFresh guidelines look exactly the same to me as PA's, so I imagine you're okay to report. We use representative income, so the caseworker interviewing you might ask about your typical cash income in a given month and use that; I've seen clients sign a handwritten statement that they receive X dollars per month in cash. Good luck - I've seen SNAP help people who really needed it, I hope you apply.
posted by deliriouscool at 6:07 AM on August 16, 2016 [10 favorites]

Are you confident that the $250 will go on for at least a year? I mean, is it possible that your friend will not need you one month? If that is the case, I would not report non recurring variable income. If you do, then you need to refile every month when it changes. If you are paid $500 one month, do you intend to refile? If you make $10 one month, refile?
posted by AugustWest at 8:28 AM on August 16, 2016

Just for your reference, under the normal conditions of casual household labor, it would not be you paying self-employment tax. Since you are earning more than $2000 this year, your friend should be paying the employer half of FICA and you your half, as with your part-time job. The paperwork responsibility would fall on your friend, not you. Your friend is effectively diddling you out of social security income down the road, as well as federal (and potentially state) unemployment insurance payments, should you become unemployed. (And both of you are likely committing tax fraud by not reporting, although the odds of getting caught are very low.)

I'm not going to wag my finger at a person trying to get by on so little, but you should know the precise situation you're in. Including that you're not saving yourself trouble by not reporting--you're letting your friend cheap out on you.
posted by praemunire at 9:24 AM on August 16, 2016 [1 favorite]

james33: At least in PA, there is a regular reporting process, which includes bank statements. Unless someone is getting paid entirely in cash, monthly deposits of $250 would be a clue there's unreported income happening.

It's entirely possible the asker might be able to slip by if they don't report the income. I imagine the State of California's welfare caseworkers are as overworked, overwhelmed, and compassion-fatigues as the people I worked with, after all. But why risk it if you get the caseworker who takes out their stress by being a stickler to the rules, or who will cut off benefits because it's easier than doing an investigation?
posted by SansPoint at 10:12 AM on August 16, 2016

Could you call it a gift, or financial help you're receiving from a friend?
posted by kjs4 at 3:27 AM on August 17, 2016

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