TN 255 (10-24)
Prior to 11/1/82, interest earned on an individual's burial funds (and prior to 4/1/90, interest on burial space purchase agreements) could be excluded from income only by means of the $20 general income exclusion or the irregular or infrequent income exclusion.
Effective 11/1/82, section 185 of P.L. 97-248 provided that any interest earned on the value of excluded burial funds (SI 01130.409 ff) is excluded from income (and resources), if left to accumulate.
Effective 4/1/90, section 8013 of P.L. 101-239 provides that interest earned on agreements representing the purchase of an excluded burial space (SI 01130.400) is excluded from income (and resources), if left to accumulate.
This income exclusion applies only if the burial fund or space purchase agreement is excluded at the time the interest is paid.
Appreciation in value and interest must be left to accumulate to be excluded from income. If not left to accumulate (e.g., paid directly to the individual, spouse, or parent), the receipt may result in countable income.
If interest is paid on a burial fund or space purchase agreement and the fund or agreement is not excluded at the time the interest is paid, the interest is treated under interest income rules. See SI 00830.500.
When excluded funds or spaces are commingled with nonexcluded funds or spaces, only the interest on the excluded portion is excluded. See SI 01130.410C.
Effective April 1, 1990, it is not necessary to apply the irregular or infrequent income exclusion to interest earned on excluded burial funds or burial space purchase agreements.
You must apply the irregular or infrequent exclusion to income other than that earned on excluded burial funds or burial space purchase agreements. See SI 00810.410.
You should apply the specific burial funds or burial space interest exclusion as discussed in this section.
If funds and space items are held together in the same purchase agreement or contract, first determine which portions are funds and which are space items. See SI 01130.420.
Do not document interest if entire burial fund is excluded.
Use the following procedure to determine countable interest to be charged:
NOTE: The same ratio (in step 2) may be used every month as long as there are no deposits to or withdrawals from the total fund.
Example - Computation When Only a Portion of the Burial Fund is Excluded.
Sam Rogers filed for SSI on January 8, 2024. Sam's assets as of January 1, 2024 included the following:
Savings account ($1,000 resources) ($50 interest income posted 1/1/24)
$1,050
Irrevocable burial contract
$ 200
Nonhome real property
$ 500
Checking account
$ 474
$1,974
Sam designated $500 of their savings account for burial. Sam's available burial fund exclusion is $1,300. ($1,500 - $200 irrevocable burial contract.)
Computation of countable interest using steps above:
$500 = nonexcluded portion of funds
Divided by $1,000 (total resources in savings account for January)
Percentage of nonexcluded funds = 50 percent
Total interest paid = $50
Percentage of countable interest = 50 percent×$50 = $25 countable income for January.
If you determine that application of the burial funds exclusion ceased during a past period (SI 01130.409 ff), the interest paid on the burial funds in the months the burial funds are not excluded may result in countable income. Follow interest income development for each month that the burial funds exclusion does not apply.
Develop interest per SI 00830.500. Interest on excluded burial space purchase agreements may result in countable income.
See C.1. above.
For months beginning 4/1/90, follow the interest computation procedures explained in C.3. above when excluded and nonexcluded burial space items are held in the same purchase agreement or contract.