diff --git a/changelog.d/fix-10210-nc-work-first-earnings.fixed.md b/changelog.d/fix-10210-nc-work-first-earnings.fixed.md
new file mode 100644
index 00000000000..27cb56caff3
--- /dev/null
+++ b/changelog.d/fix-10210-nc-work-first-earnings.fixed.md
@@ -0,0 +1 @@
+Exclude children's earnings, SSI recipients' income and 27.5% of other gross earnings from North Carolina Work First countable income, and require a payment of at least $25 a month instead of $25 per household member.
diff --git a/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/benefit/payment_percentage.yaml b/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/benefit/payment_percentage.yaml
index 32b5eee1764..2240f39a13a 100644
--- a/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/benefit/payment_percentage.yaml
+++ b/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/benefit/payment_percentage.yaml
@@ -11,6 +11,6 @@ metadata:
     - title: WORK FIRST | Income and Budgeting (Change No. 04-2023, January 1, 2024)
       href: https://policies.ncdhhs.gov/wp-content/uploads/wf-114_1-2-2024.pdf#page=5
     - title: North Carolina TANF State Plan 2016-2019
-      href: https://www.ncdhhs.gov/documents/files/dss/dcdl/economicservices/efs-wf-29-2015a/download#page=35
+      href: https://www.ncdhhs.gov/documents/files/dss/dcdl/economicservices/efs-wf-29-2015a/download#page=34
     - title: North Carolina TANF State Plan 2019-2022
-      href: https://www.ncdhhs.gov/documents/files/dss/2019-2022-tanf-state-plan-draft/download#page=18
+      href: https://www.ncdhhs.gov/documents/files/dss/publications/acf-approved-2019-2022-tanf-state-plan/download#page=16
diff --git a/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/eligibility/average_reduced_need_standard_threshold.yaml b/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/eligibility/average_reduced_need_standard_threshold.yaml
index 622ca223070..3bfeab95c2b 100644
--- a/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/eligibility/average_reduced_need_standard_threshold.yaml
+++ b/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/eligibility/average_reduced_need_standard_threshold.yaml
@@ -10,3 +10,9 @@ metadata:
   reference:
     - title: WORK FIRST | Income and Budgeting (Change No. 04-2023, January 1, 2024)
       href: https://policies.ncdhhs.gov/wp-content/uploads/wf-114_1-2-2024.pdf#page=5
+    - title: North Carolina TANF State Plan 2022-2025, Financial Rules 8
+      href: https://www.ncdhhs.gov/2022-2025-tanf-state-plan-final-signedpdf/open#page=18
+    - title: North Carolina TANF State Plan FFY 2026-2028, Financial Rules 8
+      href: https://www.ncdhhs.gov/efs-wf-06-2025a2/open#page=19
+    - title: 10A NCAC 71W .0601(a), Issuance of Funds
+      href: http://reports.oah.state.nc.us/ncac/title%2010a%20-%20health%20and%20human%20services/chapter%2071%20-%20adult%20and%20family%20support/subchapter%20w/subchapter%20w%20rules.pdf#page=10
diff --git a/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/income/earned_income_exclusion_rate.yaml b/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/income/earned_income_exclusion_rate.yaml
new file mode 100644
index 00000000000..6649db4180f
--- /dev/null
+++ b/policyengine_us/parameters/gov/states/nc/ncdhhs/tanf/income/earned_income_exclusion_rate.yaml
@@ -0,0 +1,18 @@
+description: North Carolina excludes this share of gross earned income when computing countable income under the Temporary Assistance for Needy Families program.
+
+values:
+  1997-01-01: 0.275
+
+metadata:
+  unit: /1
+  period: year
+  label: North Carolina TANF earned income exclusion rate
+  reference:
+    - title: North Carolina TANF State Plan 2016-2019, Financial Rules 6
+      href: https://www.ncdhhs.gov/documents/files/dss/dcdl/economicservices/efs-wf-29-2015a/download#page=34
+    - title: North Carolina TANF State Plan 2019-2022, Financial Rules 6
+      href: https://www.ncdhhs.gov/documents/files/dss/publications/acf-approved-2019-2022-tanf-state-plan/download#page=16
+    - title: North Carolina TANF State Plan 2022-2025, Financial Rules 6
+      href: https://www.ncdhhs.gov/2022-2025-tanf-state-plan-final-signedpdf/open#page=17
+    - title: North Carolina TANF State Plan FFY 2026-2028, Financial Rules 6
+      href: https://www.ncdhhs.gov/efs-wf-06-2025a2/open#page=18
diff --git a/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/integration.yaml b/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/integration.yaml
index 74811deca3b..e69796b5b0d 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/integration.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/integration.yaml
@@ -50,7 +50,7 @@
   output:
     nc_tanf: 0
 
-- name: One adult and one child household with $422 monthly income receives $300 per year
+- name: One adult and one child household with $422 monthly income receives $996.30 per year
   period: 2024
   input:
     people:
@@ -68,7 +68,8 @@
         members: [adult1, child1]
         state_code: NC
   output:
-    nc_tanf: 300
+    # Countable earnings: 422 * (1 - 0.275) = 305.95; 0.5 * (472 - 305.95) = 83.025 a month
+    nc_tanf: 83.025 * 12  # 996.30
 
 - name: One adult and two children household with one SSI recipient receives $236 per month
   period: 2024
@@ -93,7 +94,7 @@
   output:
     nc_tanf: 236 * 12
 
-- name: One adult and two children household with $400 monthly income and one SSI recipient receives $36 per month
+- name: One adult and two children household with $400 monthly income and one SSI recipient receives $91 per month
   period: 2024
   input:
     people:
@@ -114,9 +115,10 @@
         members: [adult1, child1, child2]
         state_code: NC
   output:
-    nc_tanf: 36 * 12
+    # Countable earnings: 400 * (1 - 0.275) = 290; 0.5 * (472 - 290) = 91 a month
+    nc_tanf: 91 * 12
 
-- name: One adult and two children household with $400 monthly income and two SSI recipient receives $0 per month
+- name: One adult and two children household with $400 monthly income and two SSI recipient receives $36 per month
   period: 2024
   input:
     people:
@@ -138,9 +140,10 @@
         members: [adult1, child1, child2]
         state_code: NC
   output:
-    nc_tanf: 0
+    # Household size 1. Countable earnings: 400 * (1 - 0.275) = 290; 0.5 * (362 - 290) = 36 a month
+    nc_tanf: 36 * 12
 
-- name: One adult and two children household with $330 monthly income and two SSI recipient receives $16 per month
+- name: One adult and two children household with $330 monthly income and two SSI recipient receives $61.375 per month
   period: 2024
   input:
     people:
@@ -162,9 +165,10 @@
         members: [adult1, child1, child2]
         state_code: NC
   output:
-    nc_tanf: 16 * 12
+    # Countable earnings: 330 * (1 - 0.275) = 239.25; 0.5 * (362 - 239.25) = 61.375 a month
+    nc_tanf: 61.375 * 12  # 736.50
 
-- name: One adult and one child household with income $430 monthly income receives $0 per year
+- name: One adult and one child household with income $430 monthly income receives $961.50 per year
   period: 2024
   input:
     people:
@@ -182,7 +186,8 @@
         members: [adult1, child1]
         state_code: NC
   output:
-    nc_tanf: 0
+    # Countable earnings: 430 * (1 - 0.275) = 311.75; 0.5 * (472 - 311.75) = 80.125 a month
+    nc_tanf: 80.125 * 12  # 961.50
 
 - name: 14 people household including a child with no income receives $6252 per year
   period: 2024
@@ -252,7 +257,7 @@
   output:
     nc_tanf: (1042 - 0) * 0.5 * 12   
 
-- name: 14 people household including a child with $692 monthly income receives $300 per year
+- name: 14 people household including a child with $692 monthly income receives $3,241.80 per year
   period: 2024
   input:
     people:
@@ -318,9 +323,10 @@
         members: [adult1, adult2, adult3, adult4, adult5, adult6, adult7, adult8, adult9, adult10, adult11, adult12, adult13, child1]
         state_code: NC
   output:
-    nc_tanf: (1042 - 692) * 0.5 * 12 
+    # Countable earnings: 692 * (1 - 0.275) = 501.70; 0.5 * (1_042 - 501.70) = 270.15 a month
+    nc_tanf: 270.15 * 12  # 3_241.80
 
-- name: 14 people household including a child with $1000 monthly income receives $0 per year
+- name: 14 people household including a child with $1000 monthly income receives $1,902 per year
   period: 2024
   input:
     people:
@@ -386,4 +392,113 @@
         members: [adult1, adult2, adult3, adult4, adult5, adult6, adult7, adult8, adult9, adult10, adult11, adult12, adult13, child1]
         state_code: NC
   output:
-    nc_tanf: 0
+    # Countable earnings: 1_000 * (1 - 0.275) = 725; 0.5 * (1_042 - 725) = 158.50 a month
+    nc_tanf: 158.5 * 12  # 1_902
+
+- name: Single parent with five children and $598 monthly earnings receives $1,586.70 per year.
+  period: 2026
+  input:
+    people:
+      parent:
+        age: 30
+        employment_income: 7_176
+      child1:
+        age: 15
+      child2:
+        age: 12
+      child3:
+        age: 9
+      child4:
+        age: 6
+      child5:
+        age: 3
+    spm_units:
+      spm_unit:
+        members: [parent, child1, child2, child3, child4, child5]
+    households:
+      household:
+        members: [parent, child1, child2, child3, child4, child5]
+        state_code: NC
+  output:
+    # Countable earnings: 7_176 * (1 - 0.275) = 5_202.60 (433.55 a month)
+    nc_tanf_countable_earned_income: 5_202.6
+    # Need standard for 6: 698 * 12 = 8_376; 8_376 - 5_202.60 = 3_173.40
+    nc_tanf_reduced_need_standard: 3_173.4
+    nc_tanf_income_eligible: true
+    # 0.5 * 3_173.40 = 1_586.70 (132.225 a month)
+    nc_tanf: 1_586.7
+
+- name: Parent with two children and $600 monthly earnings receives $54.50 per month.
+  period: 2026
+  input:
+    people:
+      parent:
+        age: 30
+        employment_income: 7_200
+      child1:
+        age: 8
+      child2:
+        age: 4
+    spm_units:
+      spm_unit:
+        members: [parent, child1, child2]
+    households:
+      household:
+        members: [parent, child1, child2]
+        state_code: NC
+  output:
+    # Countable earnings: 600 * (1 - 0.275) = 435 a month; 0.5 * (544 - 435) = 54.50
+    nc_tanf: 54.5 * 12
+
+- name: Two parents and a child, where the parent with $400 monthly earnings receives SSI, receive $236 per month.
+  period: 2024
+  input:
+    people:
+      parent_a:
+        age: 35
+        employment_income: 400 * 12
+        receives_ssi: true
+      parent_b:
+        age: 35
+      child:
+        age: 5
+    spm_units:
+      spm_unit:
+        members: [parent_a, parent_b, child]
+    households:
+      household:
+        members: [parent_a, parent_b, child]
+        state_code: NC
+  output:
+    # The SSI recipient is not in the household size, and none of their
+    # income is counted (State Plan Financial Rules 3).
+    nc_tanf_household_size: 2
+    nc_tanf_countable_earned_income: 0
+    # Need standard for 2: 472 a month; 0.5 * (472 - 0) = 236 a month
+    nc_tanf: 236 * 12
+
+- name: A parent who receives SSI and $300 monthly child support for a child aged 5 receives $31 per month.
+  period: 2024
+  input:
+    people:
+      parent:
+        age: 35
+        receives_ssi: true
+        child_support_received: 300 * 12
+      child:
+        age: 5
+    spm_units:
+      spm_unit:
+        members: [parent, child]
+        is_tanf_enrolled: false
+    households:
+      household:
+        members: [parent, child]
+        state_code: NC
+  output:
+    # The SSI parent is not in the household size. WF-114 section XII: child
+    # support is the dependent child's income, so the 300 a month counts.
+    nc_tanf_household_size: 1
+    nc_tanf_countable_gross_unearned_income: 3_600
+    # Need standard for 1: 362 a month; 0.5 * (362 - 300) = 31 a month
+    nc_tanf: 31 * 12
diff --git a/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_countable_earned_income.yaml b/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_countable_earned_income.yaml
index 58a21f01e9f..af40e8da3db 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_countable_earned_income.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_countable_earned_income.yaml
@@ -7,29 +7,99 @@
   output:
     nc_tanf_countable_earned_income: 0
 
-- name: Earned employee income $500, self-employment income $500, $1000 per year
+- name: Earned employee income $500, self-employment income $500, $725 per year
   period: 2024
   input:
     state_code: NC
     employment_income: 500
     self_employment_income: 500
   output:
-    nc_tanf_countable_earned_income: 1_000
+    nc_tanf_countable_earned_income: 725  # 1_000 * (1 - 0.275)
 
-- name: Earned employee income $500, no self-employment income, $500 per year
+- name: Earned employee income $500, no self-employment income, $362.50 per year
   period: 2024
   input:
     state_code: NC
     employment_income: 500
     self_employment_income: 0
   output:
-    nc_tanf_countable_earned_income: 500
+    nc_tanf_countable_earned_income: 362.5  # 500 * (1 - 0.275)
 
-- name: Earned employee income $0, self-employment income $500, $500 per year
+- name: Earned employee income $0, self-employment income $500, $362.50 per year
   period: 2024
   input:
     state_code: NC
     employment_income: 0
     self_employment_income: 500
   output:
-    nc_tanf_countable_earned_income: 500
+    nc_tanf_countable_earned_income: 362.5  # 500 * (1 - 0.275)
+
+- name: A child's earnings are not counted.
+  period: 2024
+  input:
+    people:
+      parent:
+        age: 30
+        employment_income: 6_000
+      child:
+        age: 16
+        employment_income: 3_000
+    spm_units:
+      spm_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: NC
+  output:
+    # Only the parent's earnings count: 6_000 * (1 - 0.275) = 4_350
+    nc_tanf_countable_earned_income: 4_350
+
+- name: Earnings of an 18-year-old not in high school are counted (PolicyEngine counts every non-SSI member who is not a child).
+  period: 2024
+  input:
+    people:
+      parent:
+        age: 40
+        employment_income: 0
+      adult_child:
+        age: 18
+        employment_income: 3_000
+    spm_units:
+      spm_unit:
+        members: [parent, adult_child]
+    households:
+      household:
+        members: [parent, adult_child]
+        state_code: NC
+  output:
+    # Age 18 is not below the age limit of 18, so PolicyEngine counts the
+    # earnings: 3_000 * (1 - 0.275) = 2_175. This approximates the rule, which
+    # counts parents' income (10A NCAC 71W .0408(a)(1)) and keeps an 18-year-old
+    # in high school as a child (State Plan Non-Financial Eligibility Rules 1).
+    nc_tanf_countable_earned_income: 2_175
+
+- name: An SSI recipient's earnings are not counted, and the other parent's earnings are.
+  period: 2024
+  input:
+    people:
+      parent_a:
+        age: 35
+        employment_income: 4_800
+        receives_ssi: true
+      parent_b:
+        age: 35
+        employment_income: 2_000
+      child:
+        age: 5
+    spm_units:
+      spm_unit:
+        members: [parent_a, parent_b, child]
+    households:
+      household:
+        members: [parent_a, parent_b, child]
+        state_code: NC
+  output:
+    # State Plan Financial Rules 3: the income of SSI recipients is not counted.
+    # Only parent B's earnings count: 2_000 * (1 - 0.275) = 1_450
+    nc_tanf_countable_earned_income: 1_450
diff --git a/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_countable_gross_unearned_income.yaml b/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_countable_gross_unearned_income.yaml
index 966688e984f..cf6d11ee2ed 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_countable_gross_unearned_income.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_countable_gross_unearned_income.yaml
@@ -106,3 +106,60 @@
     receives_tanf: true
   output:
     nc_tanf_countable_gross_unearned_income: 5_000
+
+- name: An SSI recipient's unearned income is not counted; child support they receive for a child in the unit is.
+  period: 2024
+  input:
+    people:
+      parent:
+        age: 35
+        social_security: 6_000
+        child_support_received: 1_000
+        receives_ssi: true
+      other_parent:
+        age: 35
+        pension_income: 1_200
+        child_support_received: 500
+      child:
+        age: 5
+    spm_units:
+      spm_unit:
+        members: [parent, other_parent, child]
+        is_tanf_enrolled: false
+    households:
+      household:
+        members: [parent, other_parent, child]
+        state_code: NC
+  output:
+    # State Plan Financial Rules 3 and 4: the SSI parent's Social Security is
+    # not counted. WF-114 section XII: child support is the dependent child's
+    # income, so the SSI parent's 1_000 counts. 1_200 + 500 + 1_000 = 2_700
+    nc_tanf_countable_gross_unearned_income: 2_700
+
+- name: Child support an SSI-recipient child receives is not counted.
+  period: 2024
+  input:
+    people:
+      parent:
+        age: 35
+        pension_income: 1_200
+      ssi_child:
+        age: 8
+        child_support_received: 2_400
+        receives_ssi: true
+      child:
+        age: 5
+        child_support_received: 600
+    spm_units:
+      spm_unit:
+        members: [parent, ssi_child, child]
+        is_tanf_enrolled: false
+    households:
+      household:
+        members: [parent, ssi_child, child]
+        state_code: NC
+  output:
+    # The SSI child's support is that child's own income, and no income of SSI
+    # recipients is counted (State Plan Financial Rules 3 and 4).
+    # 1_200 + 600 = 1_800
+    nc_tanf_countable_gross_unearned_income: 1_800
diff --git a/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_income_eligible.yaml b/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_income_eligible.yaml
index 386d05f8755..caf235b166e 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_income_eligible.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/tanf/nc_tanf_income_eligible.yaml
@@ -45,3 +45,47 @@
     nc_demographic_tanf_eligible: true
   output:
     nc_tanf_income_eligible: false
+
+- name: Six-person household with a $50 payment is eligible; the $25 minimum is not divided by household size.
+  period: 2024
+  input:
+    state_code: NC
+    nc_tanf_reduced_need_standard: 100 * 12
+    nc_tanf_household_size: 6
+    nc_demographic_tanf_eligible: true
+  output:
+    # Payment: 0.5 * 100 = 50 a month >= 25
+    nc_tanf_income_eligible: true
+
+- name: One-person household with a $20 payment is ineligible.
+  period: 2024
+  input:
+    state_code: NC
+    nc_tanf_reduced_need_standard: 40 * 12
+    nc_tanf_household_size: 1
+    nc_demographic_tanf_eligible: true
+  output:
+    # Payment: 0.5 * 40 = 20 a month < 25
+    nc_tanf_income_eligible: false
+
+- name: Payment of exactly $25 is eligible.
+  period: 2024
+  input:
+    state_code: NC
+    nc_tanf_reduced_need_standard: 50 * 12
+    nc_tanf_household_size: 2
+    nc_demographic_tanf_eligible: true
+  output:
+    # Payment: 0.5 * 50 = 25 a month >= 25
+    nc_tanf_income_eligible: true
+
+- name: Payment of $24.50 is ineligible.
+  period: 2024
+  input:
+    state_code: NC
+    nc_tanf_reduced_need_standard: 49 * 12
+    nc_tanf_household_size: 2
+    nc_demographic_tanf_eligible: true
+  output:
+    # Payment: 0.5 * 49 = 24.50 a month < 25
+    nc_tanf_income_eligible: false
diff --git a/policyengine_us/tests/policy/baseline/partners/analytics_coverage/edge_cases/state/nc/tanf.yaml b/policyengine_us/tests/policy/baseline/partners/analytics_coverage/edge_cases/state/nc/tanf.yaml
index 13044985842..32d3ed6136b 100644
--- a/policyengine_us/tests/policy/baseline/partners/analytics_coverage/edge_cases/state/nc/tanf.yaml
+++ b/policyengine_us/tests/policy/baseline/partners/analytics_coverage/edge_cases/state/nc/tanf.yaml
@@ -1,7 +1,9 @@
 # NC TANF (Work First, nc_tanf) — need standard (need_standard/main.yaml, monthly):
 # size 2 = 472, size 3 = 544, size 4 = 594. Benefit = 50% of (need standard -
 # countable earned + unearned income) (benefit/payment_percentage.yaml).
-# Income-eligible only if reduced need standard per person >= 25/mo = 300/yr
+# Countable earned income excludes 27.5% of adults' gross earnings
+# (income/earned_income_exclusion_rate.yaml). Income-eligible only if the
+# payment is >= 25/mo = 300/yr
 # (eligibility/average_reduced_need_standard_threshold.yaml). Demographic
 # eligibility requires a child under 18 (eligibility/age_limit.yaml).
 - name: tanf_max_benefit_youngest_child_age_17 (nc)
@@ -267,11 +269,11 @@
   output:
     spm_units:
       spm_unit:
-        # Earned income 3_000 (no disregard in NC countable earned income):
-        # reduced need standard = 6_528 - 3_000 = 3_528 (per person 1_176 >= 300).
-        # nc_tanf = 3_528 x 0.5 = 1_764.
-        nc_tanf: 1_764
-        tanf: 1_764
+        # Countable earned income = 3_000 x (1 - 0.275) = 2_175;
+        # reduced need standard = 6_528 - 2_175 = 4_353.
+        # nc_tanf = 4_353 x 0.5 = 2_176.50 (>= 300).
+        nc_tanf: 2_176.5
+        tanf: 2_176.5
 - name: tanf_self_employment_income_counted_as_earned (nc)
   period: 2026
   absolute_error_margin: 0.1
@@ -322,11 +324,11 @@
     spm_units:
       spm_unit:
         # Self-employment income is in the NC earned-income source list
-        # (income/earned.yaml). Size-2 need standard = 472 x 12 = 5_664;
-        # reduced = 5_664 - 2_400 = 3_264 (per person 1_632 >= 300).
-        # nc_tanf = 3_264 x 0.5 = 1_632.
-        nc_tanf: 1_632
-        tanf: 1_632
+        # (income/earned.yaml). Countable = 2_400 x (1 - 0.275) = 1_740.
+        # Size-2 need standard = 472 x 12 = 5_664; reduced = 5_664 - 1_740 = 3_924.
+        # nc_tanf = 3_924 x 0.5 = 1_962 (>= 300).
+        nc_tanf: 1_962
+        tanf: 1_962
 - name: tanf_income_at_min_benefit_boundary_eligible (nc)
   period: 2026
   absolute_error_margin: 0.1
@@ -339,7 +341,7 @@
         is_tax_unit_dependent: false
         is_disabled: false
         immigration_status_str: CITIZEN
-        employment_income_before_lsr: 5_628
+        employment_income_before_lsr: 8_176
       spouse:
         age: 28
         is_tax_unit_head: false
@@ -386,11 +388,11 @@
   output:
     spm_units:
       spm_unit:
-        # Exact eligibility cliff for size 3: reduced = 6_528 - 5_628 = 900;
-        # per person 900 / 3 = 300 >= 300 (25/mo x 12) -> still eligible.
-        # nc_tanf = 900 x 0.5 = 450. Binds the >= comparison.
-        nc_tanf: 450
-        tanf: 450
+        # Eligibility cliff for size 3: countable = 8_176 x (1 - 0.275) = 5_927.60;
+        # reduced = 6_528 - 5_927.60 = 600.40; payment = 600.40 x 0.5 = 300.20
+        # >= 300 (25/mo x 12) -> still eligible. nc_tanf = 300.20.
+        nc_tanf: 300.2
+        tanf: 300.2
 - name: tanf_income_just_above_min_benefit_boundary (nc)
   period: 2026
   absolute_error_margin: 0.1
@@ -403,7 +405,7 @@
         is_tax_unit_dependent: false
         is_disabled: false
         immigration_status_str: CITIZEN
-        employment_income_before_lsr: 5_629
+        employment_income_before_lsr: 8_177
       spouse:
         age: 28
         is_tax_unit_head: false
@@ -450,9 +452,8 @@
   output:
     spm_units:
       spm_unit:
-        # One dollar past the cliff: reduced = 6_528 - 5_629 = 899;
-        # per person 899 / 3 = 299.67 < 300 -> income-ineligible -> 0.
-        # (The prior file's names claimed a 5_687 threshold; the actual
-        # cliff sits between 5_628 and 5_629.)
+        # One dollar past the cliff: countable = 8_177 x (1 - 0.275) = 5_928.325;
+        # reduced = 6_528 - 5_928.325 = 599.675; payment = 299.84 < 300
+        # -> income-ineligible -> 0. The cliff sits between 8_176 and 8_177.
         nc_tanf: 0
         tanf: 0
diff --git a/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/income/nc_tanf_countable_earned_income.py b/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/income/nc_tanf_countable_earned_income.py
index ebff65fa7a6..b472e3990d6 100644
--- a/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/income/nc_tanf_countable_earned_income.py
+++ b/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/income/nc_tanf_countable_earned_income.py
@@ -8,5 +8,21 @@ class nc_tanf_countable_earned_income(Variable):
     unit = USD
     definition_period = YEAR
     defined_for = StateCode.NC
+    reference = (
+        "https://www.ncdhhs.gov/efs-wf-06-2025a2/open#page=18",
+        "https://policies.ncdhhs.gov/wp-content/uploads/wf-114_1-2-2024.pdf#page=2",
+        "http://reports.oah.state.nc.us/ncac/title%2010a%20-%20health%20and%20human%20services/chapter%2071%20-%20adult%20and%20family%20support/subchapter%20w/subchapter%20w%20rules.pdf#page=7",
+    )
 
-    adds = "gov.states.nc.ncdhhs.tanf.income.earned"
+    def formula(spm_unit, period, parameters):
+        p = parameters(period).gov.states.nc.ncdhhs.tanf
+        person = spm_unit.members
+        gross_earned = add(person, period, p.income.earned)
+        # State Plan Financial Rules 3: all income is counted except the
+        # earnings of children and the income of SSI recipients.
+        is_child = person("age", period) < p.eligibility.age_limit
+        is_ssi_recipient = (person("ssi", period) > 0) | person("receives_ssi", period)
+        counted = ~is_child & ~is_ssi_recipient
+        countable_earned = spm_unit.sum(where(counted, gross_earned, 0))
+        # State Plan Financial Rules 6: 27.5% of gross earned income is excluded.
+        return countable_earned * (1 - p.income.earned_income_exclusion_rate)
diff --git a/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/income/nc_tanf_countable_gross_unearned_income.py b/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/income/nc_tanf_countable_gross_unearned_income.py
index dd687f5c329..7465cb0f1ed 100644
--- a/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/income/nc_tanf_countable_gross_unearned_income.py
+++ b/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/income/nc_tanf_countable_gross_unearned_income.py
@@ -8,12 +8,31 @@ class nc_tanf_countable_gross_unearned_income(Variable):
     unit = USD
     definition_period = YEAR
     defined_for = StateCode.NC
+    reference = (
+        "https://www.ncdhhs.gov/efs-wf-06-2025a2/open#page=18",
+        # PDF pages 2, 45
+        "https://policies.ncdhhs.gov/wp-content/uploads/wf-114_1-2-2024.pdf#page=2",
+        "http://reports.oah.state.nc.us/ncac/title%2010a%20-%20health%20and%20human%20services/chapter%2071%20-%20adult%20and%20family%20support/subchapter%20w/subchapter%20w%20rules.pdf#page=7",
+    )
 
     def formula(spm_unit, period, parameters):
-        p = parameters(period).gov.states.nc.ncdhhs.tanf.income
-        # Sum unearned sources, plus child support if not currently enrolled.
-        gross_unearned = add(spm_unit, period, p.unearned)
-        child_support = add(spm_unit, period, ["child_support_received"])
+        p = parameters(period).gov.states.nc.ncdhhs.tanf
+        person = spm_unit.members
+        # State Plan Financial Rules 3 and 4: no income of SSI recipients
+        # is counted.
+        is_ssi_recipient = (person("ssi", period) > 0) | person("receives_ssi", period)
+        gross_unearned = add(person, period, p.income.unearned)
+        countable_unearned = spm_unit.sum(where(is_ssi_recipient, 0, gross_unearned))
+        # WF-114 section XII: child support is unearned income of the
+        # dependent child, so support an SSI-recipient parent receives for a
+        # child in the unit counts. Only an SSI-recipient child's own child
+        # support is excluded.
+        is_child = person("age", period) < p.eligibility.age_limit
+        child_support = person("child_support_received", period)
+        countable_child_support = spm_unit.sum(
+            where(is_ssi_recipient & is_child, 0, child_support)
+        )
+        # Child support counts only if the unit is not currently enrolled.
         tanf_enrolled = spm_unit("is_tanf_enrolled", period.first_month)
-        additional_amount = where(tanf_enrolled, 0, child_support)
-        return gross_unearned + additional_amount
+        additional_amount = where(tanf_enrolled, 0, countable_child_support)
+        return countable_unearned + additional_amount
diff --git a/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/nc_tanf_income_eligible.py b/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/nc_tanf_income_eligible.py
index 423f44ef818..9608b9fbecc 100644
--- a/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/nc_tanf_income_eligible.py
+++ b/policyengine_us/variables/gov/states/nc/ncdhhs/tanf/nc_tanf_income_eligible.py
@@ -7,20 +7,21 @@ class nc_tanf_income_eligible(Variable):
     label = "North Carolina TANF income eligible"
     definition_period = YEAR
     defined_for = "nc_demographic_tanf_eligible"
+    reference = (
+        "https://www.ncdhhs.gov/efs-wf-06-2025a2/open#page=19",
+        "https://policies.ncdhhs.gov/wp-content/uploads/wf-114_1-2-2024.pdf#page=5",
+    )
 
     def formula(spm_unit, period, parameters):
-        p = parameters(period).gov.states.nc.ncdhhs.tanf.eligibility
+        p = parameters(period).gov.states.nc.ncdhhs.tanf
         household_size = spm_unit("nc_tanf_household_size", period)
         reduced_need_standard = spm_unit("nc_tanf_reduced_need_standard", period)
-
-        need_standard_fraction = np.divide(
-            reduced_need_standard,
-            household_size,
-            out=np.zeros_like(reduced_need_standard, dtype=float),
-            where=household_size != 0,
-        )
-        difference_threshold = (
-            p.average_reduced_need_standard_threshold * MONTHS_IN_YEAR
+        # State Plan Financial Rules 8: a family remains eligible if the
+        # payment (50% of the difference between countable income and the
+        # need standard) is $25 or more.
+        payment = reduced_need_standard * p.benefit.payment_percentage
+        minimum_payment = (
+            p.eligibility.average_reduced_need_standard_threshold * MONTHS_IN_YEAR
         )
 
-        return need_standard_fraction >= difference_threshold
+        return (household_size > 0) & (payment >= minimum_payment)