(a) Individual income is counted as part of the household income unless:(1) the individual is a child who is included in the household composition of a parent and is not required to file a federal income tax return for the taxable year in which CHIP eligibility is requested; or(2) the individual is a tax dependent and is not required to file a federal income tax return for the taxable year in which CHIP eligibility is requested.(b) Individual income described in subsection (a)(1) of this section is excluded from the household income of each individual in the household composition as defined in §370.807 of this subchapter (relating to Determination of Household Composition).(c) Individual income described in subsection (a)(2) of this section is excluded from the household income of the taxpayer.