110 STAT. 2310 PUBLIC LAW 104-193—AUG. 22, 1996 States and the District of Columbia, Alaska, Hawaii, Guam, and the Virgin Islands of the United States of $134, $229, $189, $269, and $118, respectively. "(2) EARNED INCOME DEDUCTION.— "(A) DEFINITION OF EARNED INCOME.— In this paragraph, the term 'earned income' does not include— "(i) income excluded by subsection (d); or "(ii) any portion of income earned under a work supplementation or support program, as defined under section 16(b), that is attributable to public assisteince. "(B) DEDUCTION. — Except as provided in subparagraph (C), a household with earned income shall be allowed a deduction of 20 percent of all earned income to compensate for taxes, other mandatory deductions from salary, and work expenses. "(C) EXCEPTION. —The deduction described in subparagraph (B) shall not be allowed with respect to determining an overissuance due to the failure of a household to report earned income in a timely manner. "(3) DEPENDENT CARE DEDUCTION. — "(A) IN GENERAL.—^A household shall be entitled, with respect to expenses (other than excluded expenses described in subparagraph (B)) for dependent care, to a dependent care deduction, the maximum allowable level of which shall be $200 per month for each dependent child under 2 years of age and $175 per month for each other dependent, for the actual cost of payments necessary for the care of a dependent if the care enables a household member to accept or continue employment, or training or education that is preparatory for employment. "(B) EXCLUDED EXPENSES.— The excluded expenses referred to in subparagraph (A) are— "(i) expenses paid on behalf of the household by a third party; "(ii) amounts made available and excluded, for the expenses referred to in subparagraph (A), under subsection (d)(3); and "(iii) expenses that are paid under section 6(d)(4). "(4) DEDUCTION FOR CHILD SUPPORT PAYMENTS.— "(A) IN GENERAL.— A household shall be entitled to a deduction for child support payments made by a household member to or for an individual who is not a member of the household if the household member is legally obligated to make the pa5nnents. "(B) METHODS FOR DETERMINING AMOUNT.—The Secretary may prescribe by regulation the methods, including calculation on a retrospective basis, that a State agency shall use to determine the amount of the deduction for child support payments. "(5) HOMELESS SHELTER ALLOWANCE.—Under rules prescribed by the Secretary, a State agency may develop a standard homeless shelter allowance, which shall not exceed $143 per month, for such expenses as may reasonably be expected to be incurred by households in which all members are homeless individuals but are not receiving free shelter throughout the month. A State agency that develops the allowance may use the allowance in determining eligibility and allotments for the
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