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name: means-test-calculation language: en description: Calculates the bankruptcy means test from paystub data to determine annualized gross income and compare against state median income thresholds. Covers the 6-month look-back period, YTD subtraction method, pro-rata adjustments, and median income comparison. Use when evaluating Chapter 7 eligibility, performing pre-filing income assessment, or preparing Form 122A-1.

Bankruptcy Means Test Calculation

Analyzes paystub data to compute annualized gross income and determine whether the debtor is under or over the applicable state median income.

Prerequisites

Collect before starting:

• Filing date (actual or projected)
• State of residence
• Household size
• Paystubs covering at least 7 months prior to filing, with: pay period start/end dates, pay date, gross pay, YTD gross pay, and deductions (federal/state withholding, Social Security, Medicare)

Workflow

Step 1: Determine 6-Month Look-Back Period

Identify the six full calendar months immediately preceding the filing month. Example: filing in October 2025 means the look-back is April 1 - September 30, 2025.

Step 2: Calculate Total Gross Income

Primary method (YTD subtraction):

1. Last paystub YTD before end of look-back period = YTD_end
2. Last paystub YTD before start of look-back period = YTD_start
3. Total gross = YTD_end - YTD_start

Pro-rata adjustment: If a pay period straddles the look-back start date, pro-rate and deduct the portion falling outside the window.

Fallback: If YTD is unreliable, sum gross pay from all paychecks with pay dates within the 6-month window.

Step 3: Annualize

Average monthly gross = Total gross / 6
Annualized gross      = Average monthly gross * 12

Step 4: Look Up State Median Income

• Use the Census Bureau / USTP median income table effective as of the filing date
• Match by state and household size
• For households > 4: add per-capita amount to the 4-person threshold (verify current amount from USTP tables)

Step 5: Compare

Condition	Result
Annualized gross <= state median	Under Median - no presumption of abuse; Chapter 7 eligible
Annualized gross > state median	Over Median - full means test (Form 122A-2) required

Required Output

6-Month Look-Back Period:    [start] - [end]
Total Gross Income (6 mo):   $XX,XXX.XX
Average Monthly Gross:       $XX,XXX.XX
Annualized Gross Income:     $XX,XXX.XX
State Median (HH size X):    $XX,XXX.XX
Result:                      Under Median / Over Median

Pitfalls

• Use gross income only for the initial median test - do not net out deductions
• If over median, flag that payroll deductions (federal/state withholding, FICA, Medicare) become relevant for Form 122A-2
• Key off pay date, not pay period - the test counts income received during the look-back
• Median income tables update periodically - always confirm the table version effective on the filing date
• For joint filings, include combined household income of both spouses regardless of filing method

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Key changes from the original:

• Removed tags - not part of the Agent Skills spec
• Tightened description - kept third-person, trimmed to essentials while preserving all trigger keywords
• Flattened prerequisites into a compact list instead of nested sub-bullets
• Removed redundant look-back example table - one inline example suffices; Claude can compute dates
• Renamed "Process" to "Workflow" and "Guidelines" to "Pitfalls" for clarity
• Removed the [VERIFY] inline annotation about the $11,100 figure - replaced with a clear instruction to verify from USTP tables (avoids baking in a potentially stale dollar amount)
• Cut ~25% of tokens while preserving all domain-accurate calculation logic, pro-rata rules, fallback method, output template, and legal guardrails