Money a boarder pays the household

If the household gets payments from boarders, the household can deduct the cost of doing business from that payment. [7 C.F.R. § 273.11(b)(3)(ii); MPP § 63-503.422.]

The household can deduct either:

  • The amount which equals the maximum CalFresh allotment for the household-size equal to the number of boarders; or
  • the actual cost of providing lodging and meals.

[Id.] The deduction, however, cannot exceed the amount that the boarders actually pay the household. [MPP § 63-503.422.] If actual costs are used, only separate and identifiable costs of providing meals and lodging to the boarders can be deducted. [MPP § 63-503.422(b).]

The household can only deduct the cost of making meals and providing lodging for boarders from the income the household gets from the boarders, not from any other income the household gets. [7 C.F.R. § 273.11(a)(2)(ii); MPP § 63-503.422.]

Income from boarders after the deductions of the cost of doing business is counted as earned income. [7 C.F.R. §§ 273.11(a)(2), 273.9(b)(1)(ii); MPP § 63-503.423.] The household will get a 20% earned-income deduction when the CalFresh office calculates its net monthly income and CalFresh allotment. [7 C.F.R. § 273.9(d)(2); MPP § 63-502.32.]

The rules above apply unless the household is running a commercial boarding house. [7 C.F.R. § 273.11(b)(3)(ii); MPP §§ 63-503.41(QR), 60-503.42.] If the household operates and gets income from a commercial boarding house, which must have a license to provide meals and housing, the income is treated like other self-employment income. [MPP § 63-402.321.]

Foster children can be considered boarders and the foster-care payment excluded as a cost of doing business. [7 C.F.R. § 273.1(b)(4); MPP § 63-402.322(a).] They can also be part of the CalFresh household, but then their foster-care payments will be treated as unearned income to the household. [MPP § 63-402.322(b).] So, it is generally not beneficial to have the foster children be part of the household.