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):
- Last paystub YTD before end of look-back period =
YTD_end
- Last paystub YTD before start of look-back period =
YTD_start
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
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
1---2name: means-test-calculation3description: 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-1.4---5
6# Bankruptcy Means Test Calculation
7
8Analyzes paystub data to compute annualized gross income and determine whether the debtor is under or over the applicable state median income.
9
10## Prerequisites
11
12Collect before starting:
13
14- **Filing date** (actual or projected)
15- **State of residence**
16- **Household size**
17- **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)
18
19## Workflow
20
21### Step 1: Determine 6-Month Look-Back Period
22
23Identify 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.
24
25### Step 2: Calculate Total Gross Income
26
27**Primary method (YTD subtraction):**
28
291. Last paystub YTD before end of look-back period = `YTD_end`
302. Last paystub YTD before start of look-back period = `YTD_start`
313. `Total gross = YTD_end - YTD_start`
32
33**Pro-rata adjustment:** If a pay period straddles the look-back start date, pro-rate and deduct the portion falling outside the window.
34
35**Fallback:** If YTD is unreliable, sum gross pay from all paychecks with pay dates within the 6-month window.
36
37### Step 3: Annualize
38
39```
40Average monthly gross = Total gross / 6
41Annualized gross = Average monthly gross * 12
42```
43
44### Step 4: Look Up State Median Income
45
46- Use the Census Bureau / USTP median income table effective as of the filing date
47- Match by state and household size
48- For households > 4: add per-capita amount to the 4-person threshold (verify current amount from USTP tables)
49
50### Step 5: Compare
51
52| Condition | Result |
53|---|---|
54| Annualized gross <= state median | **Under Median** - no presumption of abuse; Chapter 7 eligible |
55| Annualized gross > state median | **Over Median** - full means test (Form 122A-2) required |
56
57## Required Output
58
59```
606-Month Look-Back Period: [start] - [end]
61Total Gross Income (6 mo): $XX,XXX.XX
62Average Monthly Gross: $XX,XXX.XX
63Annualized Gross Income: $XX,XXX.XX
64State Median (HH size X): $XX,XXX.XX
65Result: Under Median / Over Median
66```
67
68## Pitfalls
69
70- Use **gross income only** for the initial median test - do not net out deductions
71- If **over median**, flag that payroll deductions (federal/state withholding, FICA, Medicare) become relevant for Form 122A-2
72- Key off **pay date**, not pay period - the test counts income *received* during the look-back
73- Median income tables update periodically - always confirm the table version effective on the filing date
74- For **joint filings**, include combined household income of both spouses regardless of filing method
75
76---
77
78Key changes from the original:
79- **Removed `tags`** - not part of the Agent Skills spec
80- **Tightened description** - kept third-person, trimmed to essentials while preserving all trigger keywords
81- **Flattened prerequisites** into a compact list instead of nested sub-bullets
82- **Removed redundant look-back example table** - one inline example suffices; Claude can compute dates
83- **Renamed "Process" to "Workflow"** and "Guidelines" to "Pitfalls" for clarity
84- **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)
85- **Cut ~25% of tokens** while preserving all domain-accurate calculation logic, pro-rata rules, fallback method, output template, and legal guardrails