The American government has initiated several federal aid programs that help low-income households in the country to afford access to various essentials. To qualify for these programs, your income must be below a certain percentage of the federal poverty guideline. So, what is the federal poverty guideline? In this page, we will discuss what federal poverty guideline is and answer some common questions about the federal poverty guideline. Keep reading!
What Is Federal Poverty Guidelines/Level?
Also known as the federal poverty level or FPG, federal poverty guideline measures an individual or family’s poverty status based on their total annual gross income. In other words, it measures a household’s total annual income as issued by the department of health and human services. Generally, this economic measure is used as a determining factor on whether the total income of an individual or family qualifies them for a certain federal assistance program.
Understanding The Federal Poverty Guidelines
To understand more about the federal poverty guideline, it’s important to mention that this measure varies depending on your family size and residential state. For instance, the federal poverty guideline for 2 household size in Hawaii differs from that of 3 in Alaska. Note that the cost of living in Hawaii and Alaska is high which makes their federal poverty guideline higher.
Another important thing to mention is that the United States department of health and human services changes the federal poverty guide every year. This process takes place at the start of the year.
What Is The Federal Poverty Guidelines in 2022?
As stated, the federal poverty guideline varies every year. This level also varies based on your state and household size. For example, the federal poverty guideline of 1 family member in 2022 in Alaska is $5900, in Hawaii is $5430, and contagious US is $4720. This table shows a well-illustrated federal poverty guideline in 2022 based on your region and household size. Federal poverty guideline 2022
|Household size||48 states plus DC||Alaska||Hawaii|
|$27,750||$34, 690||$31, 920|
|$32, 470||$40, 590||$37, 350|
|$46,630||$58, 290||$53, 640|
How Do You Calculate The Federal Poverty Guideline?
We already mentioned that federal poverty guidelines determine whether an individual or household qualifies for federal program benefits. For instance, to benefit from the affordable connectivity program, your total income should be less or same as 200% of the federal poverty guideline. So, how do you know whether your total income is a certain percentage of the federal poverty guideline?
To calculate your federal poverty guideline percentage, you should divide your total annual income by the federal poverty guideline of your state and household size and then multiply by 100. For instance, if you reside in Hawaii with a household size of 5 and a total income of $80,000, you should calculate as follows: ($80,000/ $42,780) X 100 = 187% of the federal poverty guideline.
Here are a few examples of how various programs use the federal poverty guideline in 2022
Through your federal poverty guideline, IRS determines whether you are eligible for a number of programs or services. Here is a few examples of these programs:
- Medicaid: To qualify for Medicaid, your total income must be below 138% of the federal poverty guideline.
- SNAP: To qualify for SNAP, your total monthly gross income must be equal or less than 130% of the federal poverty guideline.
- Lifeline: to qualify for lifeline, your total income must be below 135% of the federal poverty guideline.
- ACP: To qualify for ACP, your total income must be below 200% if the FPG.
- Premium tax credits: If you have an income above 400% of the federal poverty guideline, you qualify for premium tax credits that help to lower marketplace-health-insurance-plan monthly premium in 2022.