State Median Income Limits and the Chapter 7 Means Test

The Chapter 7 means test starts with a simple comparison: your annualized income against the median income for a household your size in your state. Come in at or below that state median, and you pass the means test automatically and can pursue a Chapter 7 discharge without any further income-and-expense scrutiny. Come in above it, and a “presumption of abuse” attaches to your case, sending you into a second, more detailed calculation to see whether you still qualify.¹

The medians change twice a year and vary widely from state to state, so the number that matters is the one published for the date you actually file.

How the Median Comparison Decides Your Case

The means test exists to keep people who can genuinely afford to repay their debts from wiping them out in Chapter 7. It runs in two stages, and the state median is the gate to the first stage.

If your annualized current monthly income is equal to or less than the median for your household size in your state, no trustee or creditor can challenge your Chapter 7 case on means-test grounds. You still fill out the first page of Form 122A-1 to document your income, but you skip the detailed expense calculations on Form 122A-2.²

Passing the means test is not the same as being guaranteed a discharge. Courts keep the authority to dismiss a case for bad faith or other reasons unrelated to means testing. From a pure income standpoint, though, below-median filers face the lowest barrier.

Land above the median and the presumption of abuse kicks in. You then move to a standardized expense analysis on Form 122A-2 that determines whether you have meaningful disposable income after covering necessary living costs. If you do, your case can be dismissed or converted to Chapter 13, which typically means a five-year repayment plan for above-median filers rather than the three-year plan available to below-median debtors in Chapter 13.³

Calculating the Income You Compare to the Median

The income figure you plug into the comparison isn’t what shows up on your last tax return or your current paystub. Bankruptcy law uses “current monthly income,” which means the average monthly income you received from all sources during the six full calendar months before your filing date, whether taxable or not.⁴

The lookback period matters. File in July and you count January through June. A spike in overtime, a bonus, or a one-time payment during one of those months pulls your average up even if it wasn’t representative of your normal earnings. Filing a month earlier or later can move you across the median line.

Form 122A-1 asks you to report income across several categories:²

Gross wages, salary, tips, bonuses, overtime, and commissions
Alimony and maintenance you receive
Regular contributions from a partner, roommate, parent, or anyone else who helps cover household bills
Net business income (gross receipts minus ordinary operating expenses) for self-employed filers
Net rental income from real property you own
Interest, dividends, and royalties
Unemployment compensation
Pension or retirement income
Any other income not listed elsewhere

Add the six-month totals, divide by six for a monthly average, and multiply by 12 to get the annualized figure. That annualized number is what you compare against the state median. Self-employed filers subtract ordinary business expenses on the income form itself, so those costs don’t get deducted again on the expense side of the test.⁵

What Income Is Left Out

Some income sources are deliberately excluded from current monthly income, and those exclusions can be the difference between passing and failing the median comparison.

The largest is Social Security. Any payment under the Social Security Act, including retirement, disability (SSDI), survivor benefits, and Supplemental Security Income (SSI), does not count.⁴ For retirees and people on disability whose primary income comes from Social Security, this exclusion alone often makes the means test a non-issue.

Also excluded:

Compensation, pensions, and allowances paid in connection with a service member’s disability, combat injury, or death. Retired pay under Chapter 61 of Title 10 is excluded only to the extent it doesn’t exceed what the member would have received under a non-disability retirement.⁴
Payments to victims of war crimes or crimes against humanity.
Payments to victims of domestic or international terrorism.

Non-Filing Spouse Income

If you’re married and living with your spouse but filing alone, your spouse’s income counts toward your current monthly income for the median comparison, even though the spouse isn’t a debtor. The rationale is that the household’s total resources matter.

The marital adjustment softens this. On Part 1 of Form 122A-2, you can subtract portions of your non-filing spouse’s income that go toward their separate expenses rather than shared household costs. Common qualifying items include payroll withholdings such as taxes and retirement contributions, student loan payments in the spouse’s name, car payments on the spouse’s vehicle, and support obligations the spouse pays for children from a prior relationship.⁵

Do not claim the same expense twice. If the mortgage is already deducted as a household expense elsewhere in the means test, it can’t also be pulled out as a marital adjustment. Trustees look closely at these deductions, and inflating them with shared costs invites objection.

Household Size Sets Which Median Applies

Household size determines which column of the median-income table you use. A single person compares against the one-earner median; a family of four uses the four-person column. Bankruptcy law does not define “household,” and courts have taken different approaches.

The “heads on beds” or Census approach counts everyone living in your home, regardless of financial ties. Simple to apply, but it can inflate your household with people who happen to sleep there without depending on you financially.
The tax-dependent approach counts yourself and anyone who qualifies as your dependent under IRS rules. Narrower, and it excludes adults who live with you but aren’t your tax dependents.
The economic-unit approach counts everyone whose finances are genuinely intertwined with yours, whether or not they’re a legal dependent.

Which method your court uses depends on the judicial district. A partner who shares bills equally would likely count under the economic-unit approach and might not under the tax-dependent one. A spouse who lives separately usually is not counted. Children in joint custody are generally included if you cover a substantial share of their expenses, even when time is split between homes. College students living away often count if you’re paying most of their bills.

Finding the Current State Median Figures

The U.S. Trustee Program at the Department of Justice publishes the median income tables used for the means test, drawing on Census Bureau American Community Survey data. New tables typically take effect around April 1 and November 1 each year.⁶ The table in effect on the date you file is the one that governs your case, not the table you were looking at while preparing paperwork.

Differences between states are large. For cases filed on or after April 1, 2026, the single-earner median runs from $53,978 in Mississippi to $88,585 in Washington. For a four-person household, the range runs from $93,672 in West Virginia to $178,524 in Massachusetts.⁶ A sample of state medians under the April 2026 tables:

California: $79,253 (1 earner) / $139,071 (family of 4)
Florida: $69,876 (1 earner) / $114,761 (family of 4)
Illinois: $73,180 (1 earner) / $137,902 (family of 4)
New York: $73,272 (1 earner) / $139,040 (family of 4)
Texas: $66,837 (1 earner) / $117,962 (family of 4)

For households larger than four, take the four-person median and add a fixed amount per additional member. Under the November 2025 tables that add-on was $11,100 annually per extra person.⁷ The figure is adjusted periodically, so check the table matching your filing date rather than relying on a prior number.

If Your Income Is Above the Median

An above-median result isn’t a disqualification on its own. It moves you into the second stage of the means test, where you subtract standardized living expenses, secured debt payments, priority debts, and certain other costs from your current monthly income. The remaining monthly figure is multiplied by 60, representing a five-year hypothetical repayment period, and compared against statutory thresholds. If the result falls below the thresholds, the presumption of abuse is eliminated and you can still proceed with Chapter 7.¹

Allowed expenses on that second stage draw from IRS national and local standards for food, clothing, personal care, health care, housing and utilities, and transportation, plus actual amounts for items like secured debt payments, priority tax and support obligations, mandatory payroll deductions, insurance premiums, and child care.⁸ A filer with a large mortgage and car payment can often subtract enough on the secured-debt line to eliminate the presumption of abuse even with above-median income.

The takeaway for the median question: crossing the state median line doesn’t decide the case, but it does decide whether you have to run the longer calculation at all.

Who Skips the Median Comparison Entirely

A few categories of filers don’t apply the means test at all, no matter what their income looks like against the state median.

Primarily Non-Consumer Debts

The means test applies only when the debtor’s obligations are “primarily consumer debts.” If more than half of your total debt by dollar amount comes from business obligations rather than personal consumer spending, the means test doesn’t apply. This is the most common exemption in practice and is why many self-employed people and failed business owners can file Chapter 7 regardless of income.¹

Disabled Veterans

A disabled veteran is exempt from means testing if two conditions are met: the veteran has a VA disability rating of at least 30 percent (or received a discharge due to a service-connected disability), and the debt was incurred primarily while on active duty or performing a homeland defense activity.¹ Both prongs must be satisfied. A veteran with the right rating whose debts arose after leaving the military would not qualify on this ground.

National Guard and Reserve Members

Members of the National Guard or a reserve component who were called to active duty or performed homeland defense activity after September 11, 2001, are exempt during their service and for 540 days after it ends, provided the qualifying period of service lasted at least 90 days.¹

1
Office of the Law Revision Counsel. 11 U.S.C. 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
2
United States Courts. Chapter 7 Statement of Your Monthly Income
3
United States Courts. Chapter 13 – Bankruptcy Basics
4
Office of the Law Revision Counsel. 11 U.S.C. 101 – Definitions
5
United States Courts. Chapter 7 Means Test Calculation (Form 122A-2)
6
United States Department of Justice. Means Testing – Median Family Income by Family Size (April 2026)
7
United States Department of Justice. Means Testing – Median Family Income by Family Size (November 2025)
8
United States Department of Justice. Means Testing (April 2026)