TN 93 (06-04)
Dividends and interest are returns on capital investments such as stocks, bonds, or
NOTE: A cash gift or incentive payment to open an account (e.g., checking, savings, certificate
of deposit, etc.) is considered interest.
If not excluded, dividends and interest are unearned income at the earlier of the
the month they are credited to an individual's account and are available for use;
the month they are set aside for the individual's use; or
the month they are received by the individual.
NOTE: Account service fees or penalties for early withdrawal do not reduce the amount
of interest or dividend income.
Section 430 of P.L. 108-203, Social Security Protection Act of 2004, provides that
dividends or interest earned on resources not excluded under §1613(a) of the Social
Security Act or excluded under other Federal statutes are excluded income for SSI
benefits payable on or after July 1, 2004.
The following describes when dividends or interest are considered income or excluded
When the source of the dividend or interest is...
a countable resource
the dividends or interest are excluded income.
an excluded resource
a Federal statute other than the Social Security Act (SI 01130.050)
§1613(a) of the Social Security Act (SI 01130.050)
See the appropriate POMS section related to the resource exclusion for treatment of
interest or dividends.
The following describes when dividends or interest are considered unearned income:
When the source of dividends or interest is a...
credits income to a customer account,
the interest is income.
computes or compounds interest or updates its own records but does not report income to a customer account,
the interest is not income.
series E/EE U.S. savings bond
was purchased by the owner; or was a gift to the owner prior to the expiration of the minimum retention period,
the interest is not income upon receipt or upon expiration of the minimum retention
Rationale: When series E/EE bonds are redeemed, the interest is an increase in the value of a
resource; it is not income.
was a gift to the owner after expiration of the minimum retention period
the bond produces income equal to the purchase price plus accrued interest through
the month the individual receives it.
series H/HH U.S. savings bonds
makes a semi-annual interest payment,
the interest is income when available to the individual.
was a gift to the owner after expiration of the minimum retention period,
life insurance policy
the dividends are not income.
pays interest on dividends accumulations,
the interest is income (this is the case even when the policy is not a resource; i.e.,
face value is under $1,500).
promissory note or other loan agreement
pays interest; or pays principal and interest in the same payment,
the interest only is income. Rationale: the principal amount represents conversion of a resource.
When it has been determined the dividend or interest income is excluded from income
counting under P.L. 108-203 beginning with benefits payable on or after July 1, 2004,
it is not necessary to develop this interest income. Remove the “R” type income for
any month that affects the SSI payment effective July 2004 or later if it is excluded
under SI 00830.500C.” Follow the normal reopening procedures in SI 04070.010F.3.
NOTE: However, the interest or dividends may be countable resources if retained into the
In redeterminations, develop countable interest income only if the total alleged value
of all countable liquid resources is more than $1,250. If the total alleged value
of all countable liquid resources is $1,250 or less, do not ask the individual about interest income and do not contact the financial institution. Do not modify any existing associated type “R” income entry on the record.
NOTE: If the individual voluntarily reports a change in interest income, accept the allegation
and make the appropriate changes to the “R” income entry on the record based on the
If you must develop dividends or interest, use the chart below to verify and document
frequency and amount. Input the amount as verified.
If the payer is a...
and the owner...
financial institution that pays interest
alleges countable liquid resources within the applicable statutory limit (SI 01110.003),
verify by accepting his/her statement either signed or recorded on a DROC as to:
type of account;
whether it pays interest; and if so,
the frequency and amount.
REMINDER: Contact with the financial institution is not necessary.
alleges countable liquid resources in excess of the statutory limit,
accept the allegations as to the three points listed above and stop development. The
individual is not eligible.
alleges joint ownership of an interest-bearing account,
see SI 00810.130.
alleges interest income,
verify amount and frequency of interest income with a check or notice issued by the
source or an amortization table. If one of these is not available, see SI 00830.005 on developing unearned income.
NOTE: If interest income is excludable because it is received infrequently or irregularly,
see SI 00810.410.
does not know whether interest income is received or due, or does not know the amount
of interest income,
inspect the loan agreement for the needed information; or
if necessary, consult an amortization schedule.
accept the allegation and stop development. The individual is not eligible.
source of interest different from above
has a check or award notice from the payer,
document the file with a copy of the check or award notice.
does not have a check or award notice,
see SI 00830.005 on developing unearned income.
source of dividends
has a check or dividend notice from the payer,
use the check or dividend notice from the source as verification; or if necessary,
see SI 00830.005 on developing unearned income.
receives payment in a form other than cash (e.g., shares of stock),
determine the value as income under instructions specific to that item.
Use the following procedure to resolve discrepancies when an individual disagrees
with the amount and/or frequency of interest or dividend payments as shown on account
records or IRS interface alerts:
If the income on an account record or IRS interface alert is...
no resolution is necessary.
not totally excludable
the individual has a reasonable explanation for the discrepancy
accept his/her allegation; and
document the file with his/her statement either signed or recorded on a DROC if the
new allegation changes the payment amount.
the individual does not have a reasonable explanation for the discrepancy
see SI 02310.048B.12.
Unless there is evidence to the contrary, assume that interest or dividend payments will continue at the current amount and frequency.
These are some (not all) of the exclusions that may apply to dividend or interest income:
Infrequent or irregular income, SI 00810.410;
Interest on and appreciation in value of excluded burial funds, SI 00830.501;
Interest on disaster assistance funds, SI 00830.620B.3. and
Interest on funds to replace certain excluded resources, SI 01130.620 - SI 01130.630.
For instructions on IRS interface alerts, see SI 02310.040 - SI 02310.100.
For development of unearned income in redeterminations, see SI 02305.099.