INCOME. All household income is counted in the Food Stamp budget unless excluded under these rules. Income can be earned or unearned. Income must be verified and documented. (06-01-94)

EARNED INCOME. Earned income includes, but is not limited to, income listed in Table 03.04401. (3-15-02)

(06-01-2001)

NOTE:

Employers often pay group life insurance, medical insurance or long term disability for employees as "flexible contributions." No taxes or FICA are withheld. These contributions are not considered to be taxable. These "flexible contributions" are counted as earned income available to the participant. The contributions are considered benefits on the job and must be counted as income.

NOTE:

The income from the sale of plasma is earned income from self- employment.

NOTE:

If income from serving on jury duty exceeds $30 in a quarter, it is treated as earned income.

NOTE:

Employment in the "Federal Stay in School Program" is counted as earned income for students over age 22 and attending an elementary or secondary school.

NOTE:

Determine if any household members are employed. Check if any household members were employed in the last two months. When the household says a member earned wages or salaries, get the:

     Name and telephone number of employer.

     Amount and frequency of earnings.

     Number of hours employed.

Proof of earned income must come from:

     The employer.

     Wage receipts.

If the household says it has no earned income, check household circumstances. The SRS may:

     Check past employment.

     Check former employers.

The SRS may accept the household's denial of other earned income if there is no evidence to the contrary.

NOTE: Partnerships and Corporations

Partnerships, Limited Liability Corporations (LLCs), and S Corporations are regarded under the law as artificial persons with income and debts independent of their members or shareholders.  Use appropriate legal or tax records to verify the type of business structure. 

With these types of businesses, expenses are taken out prior to disbursing profits.  Because of this, income from these businesses is not treated under typical self employment rules, and expenses are not allowed. 

In LLCs and S-Corps, be aware that officers often receive a separate disbursement of income for that status, in addition to their income for being a member or shareholder.  Disbursed income is treated as earned income.

If the disbursements come out less often than monthly, then average them over the period of time they are intended to cover.

If the participant has not taken any legal steps to turn their business into a Partnership, LLC, S Corp, assume it is a sole proprietorship and that normal self employment rules apply.  If it is not clear from the legal paperwork provided which type of business structure is involved, utilize your local DAG to assist in the identification of the business structure.

UNEARNED INCOME. Unearned income includes, but is not limited to income listed in Table 03.04402. (06-01-94)

(10-01-99)

NOTES: Panhandling income is unearned income and coded as a contribution.

When workers' compensation is reduced by attorney's fees, count the gross amount before the fees. Treat the income as unearned income.

Average annuities and lottery winnings paid annually over a twelve month period of time.

The Montgomery G. I. Bill - Selected Reserve Program is countable unearned income.

An unemployment claimant can earn up to one half his weekly unemployment benefit amount and still get the full weekly benefit amount for that week.

EXAMPLE:
Jack's unemployment benefit amount is $100. He earned $47 in one week. The unemployment amount was not reduced for that week. Jack got a $100 unemployment amount for that week.

When an unemployment claimant earns more than one half his weekly benefit amount, the unemployment benefit is reduced. A dollar-for-dollar reduction from the weekly amount is subtracted for every dollar earned over one half the weekly unemployment benefit amount for that week.

EXAMPLE:
Joe's unemployment benefit amount is $100. He could earn up to $50 without a reduction in unemployment benefits. But Joe earned $85 in one week. Joe earned $35 over one half the weekly benefit amount. $85 - $50 = $35. Joe got a $65 unemployment amount for that week. $100 - $35 = $65.

When an unemployment claimant earns one and one half times his weekly unemployment benefit amount in one week, he will not receive unemployment benefits for that week.

EXAMPLE:
Jane's unemployment benefit amount is $100. She earned $150. She did not get unemployment benefits for that week.

NOTES: Under Emergency Unemployment Compensation (EUC), the unemployment claimant has the option of regular unemployment (UI) or EUC. EUC is based on a previous entitlement amount. EUC can be identified on the DOE interface screen, HWI 020, Department of Employment UI Claimant Profile.

"Deferred" indicates the claimant had established an unemployment claim, discontinued that claim, and draws benefits on a prior claim. "Postponed" indicates the claimant filed a new claim, chose the option to postpone the new claim and draws benefits on a prior claim. The benefit to the claimant is that his unemployment benefits may be a higher amount.

Those claimants who receive deferred EUC are entitled to retroactive payments. These retroactive payments will be made in one lump sum. The lump sum payment amounts will not appear on the interface with DOE.

FACS Emergency Assistance payments are unearned income

Monthly FmHA Home Improvement and Repair Grants for the Elderly are unearned income.

Any amount paid by the FmHA or its representatives directly to a landlord for a participant's ongoing shelter cost must be excluded from income. When FmHA's utility allowance is more than 30% of the households adjusted income, the landlord is obligated to forward the difference to the tenant. The payment is treated the same as a HUD negative utility payment. The negative utility payment is excluded.

When employee disability insurance payments are reduced by FICA and taxes, count the gross amount before withholding and treat the income as unearned income.

Alaska Annual Permanent Fund dividend checks are considered recurring lump sum payments and are unearned income.

NOTE: When two households share rent, the rent amount of one household given to the other household is not counted as income.

EXAMPLE:
Both households sharing rent. The Smith household shares $500 monthly rent with the Jones household. The Smiths pay $200 to the Jones household. The Jones add $300 to that amount to pay the landlord the total $500 monthly rent. The $200 paid by the Smiths to the Jones is not counted as income to the Jones household.

NOTE:  One household buying the home, one household renting. When a person who is buying their home shares living expenses with another household, the money the other household pays toward the mortgage payment, property taxes, or irrigation taxes counts as unearned income to the household purchasing the home. The household purchasing the home receives the full amount of these costs as a shelter expense. 

If the other household applies for FS as a separate household, allow the amount that the household pays to the homeowner as a shelter cost.  If the households share utility costs, each household can receive the appropriate utility allowance (depending on the type and number of utilities each household pays).  See also section 03.04542 through 03.04548 for more information on shelter costs.

NOTE: Contract income from the sale of real property, minus sale expenses, is counted as unearned income.

EXAMPLE:
Shirley and Bob sold their home on contract. The new buyer pays $433 to the escrow company. The escrow company pays $338 to the bank for principal and interest on the original loan. The escrow company keeps $23 for title search, points, etc. for the sale of the home. The escrow company also keeps $8 monthly for handling fees. $64 available contract income is counted as unearned income to Shirley and Bob.

NOTES: Case Managers get Social Security Administration (SSA) benefit data through the State Online Query (SOLQ)  system. RSDI (Title II) and SSI (Title XVI) benefit data is available. One SOLQ inquiry gets RSDI and SSI information on the same person.

To request RSDI and SSI information, trigger a SOLQ inquiry on the Interface Menu (Option C).  See link for detailed instructions.   [1/1/06]

Reverse mortgage is the Home Equity Conversion Mortgage (HECM) loan. HECM is sponsored by the Farmer's Home Administration (FHA). Banks may sponsor reverse mortgage loans also. People age 62 or older can get a reverse mortgage against their home equity. The mortgage must be repaid after the person's death. Generally, proceeds of a reverse mortgage are a resource the month after the month received. Explore the terms of the reverse mortgage agreement. Make sure it is a loan and not income.

Retroactive SSI, paid in installments, is not income or resources.

EXCLUDED INCOME. Table 03.04405 lists income excluded when computing Food Stamp eligibility. (06-01-94)

Note: When an SSI payee retains the payment for his/her own needs, instead of using it for the needs of the disabled person, the income counts towards the payee and not the person for whom the payment is intended.  [1/1/06]

Example:
Food Stamp household consists of Sarah and her husband Mike.  Sarah’s mother Janet, who does not live with Sarah and Mike, is the payee for Sarah’s SSI.  Janet uses Sarah’s monthly SSI payment for her own needs and does not give this money to Sarah or use the money to meet any of Sarah’s needs.  Since Janet keeps this money for herself, do not count Sarah’s SSI in determining Food Stamp eligibility for Sarah and Mike.  [1/1/06]

(07-01-97)

NOTE: If a participant voluntarily repays an SSI overpayment to SSA in the same month the overpaid SSI was paid, the overpayment amount is excluded as income.

EXAMPLE:
Betty received $434 SSI. She was entitled to $334. Betty voluntarily repaid $100 to SSA in the same month she received the $434 check. Exclude the $100 overpayment. Count $334 SSI.

NOTE: If an RSDI benefit will be reduced to repay an SSI overpayment, the income is not from the same source. The entire RSDI entitlement, not the actual amount received, must be counted as available income.

EXAMPLE:
A $561 RSDI benefit is reduced to $501 to repay a $60 SSI overpayment. Count the full $561 as income for Food Stamps.

NOTE: If income from serving on jury duty is less than $30 in a quarter the income is excluded.

NOTE: Any amount paid by the FmHA or its representatives directly to a landlord for a participant's ongoing shelter cost must be excluded from income. When FmHA's utility allowance is more than 30% of the households adjusted income, the landlord is obligated to forward the difference to the tenant. The payment from the landlord to the tenant is unearned income. It is treated the same as a HUD negative utility payment.

INCOME EXCLUDED BY FEDERAL LAW. Income listed in Table 03.04406 is excluded by Federal law when computing Food Stamp eligibility. (3-15-02)

NOTE: Per Public Law 104-204 and 106-419, benefits paid by the Veterans Administration to the children of Vietnam veterans born with congenital spina bifida and certain other birth defects are excludable as income for food stamp purposes. [1/1/06]

NOTE: In the previous table, 03.04406 INCOME EXCLUDED BY FEDERAL LAW, Subsection 07 "P.L. 94-114 The sub-marginal lands held in trust by the U.S. for certain Indian tribal members" includes the Shoshone-Bannock tribe in Idaho.

NOTE: Domestic Volunteer Services include--

Title I

VISTA

University Year for Action

Urban Crime Prevention Program

Title II

Retired Senior Volunteer Program (RSVP)

Foster Grandparents Program

Senior Companion Program

 Senior Community Service Employment Programs include:

Green Thumb

National Council in Aging

National Council of Senior Citizens
    
American Association of Retired Persons

U.S. Forest Service

National Association for Spanish Speaking Elderly

National Urban League

National Council on Black Aging

National and Community Services Include:

AmeriCorps*USA for participants 17 years of age or older,

AmeriCorps*VISTA for participants 18 years of age or older,

AmeriCorps*NCCC for participants 16 to 24 years of age.

AmeriCorps students perform a year or two of national service. During the school year,      AmeriCorps students get a living allowance (stipend), health insurance and a child care allowance. At the end of the school year they get an education award of $4,725 per year. The educational award is to:

         *   Repay student loans.

         *   Pay all or part of the attendance costs at an institute of higher education.

         *   Pay expenses incurred by participating in an approved school- to-work program.

         *   Pay interest expenses on student loans.

Senior Corps

Senior Corps participants do volunteer work through Foster Grandparents, RSVP and similar programs for older Americans. Senior Corps participants get a living allowance (stipend) to reimburse them for out-of-pocket expenses. They may get health insurance.

INCOME AND ELIGIBILITY VERIFICATION SYSTEM (IEVS). Income must be verified with the IEVS system for all households applying for or getting Food Stamps. Income must be verified for disqualified members with income counted toward the household Food Stamp benefits. (06-01-94)

IEVS INFORMATION SOURCES. IEVS data sources are listed in Table 03.04408. (06-01-94)

USE OF IEVS INFORMATION FOR APPLICANT HOUSEHOLDS. IEVS data must be used to compute eligibility and benefits if IEVS data is received before the application is processed. IEVS data on applicant households must be used as soon as possible, even if the applicant household was approved before the IEVS data was received. Action on applications must not be delayed pending receipt of IEVS data. If IEVS data requiring further proof is received, before application approval, the proof must be obtained and resolved before approving the application. If an applicant household cannot provide an SSN at application, IEVS data must be used as soon as possible after the SSN is known. IEVS data must be used for all household members, eligible, excluded or disqualified. (06-01-94)

USE OF IEVS INFORMATION FOR RECIPIENT HOUSEHOLDS. Action on IEVS must be taken so that the case action is completed within forty-five (45) days of receipt of the IEVS data. The forty-five (45) day limit may be exceeded only if case action cannot be completed because data requested from collateral sources is not received. Case actions are listed in Table 03.04410. (06-01-94)

(06-01-94)

VERIFIED IEVS DATA. The IEVS data listed in Table 03.04411 is considered verified upon receipt, unless it is questionable. (06-01-94)

UNVERIFIED IEVS DATA. The IEVS data listed in Table 03.04412 is considered unverified. (06-01-94)

NOTE:

No further proof is needed when:

     *  IEVS records do not show employment within the last 12 months.

     *  No conflicting facts arise during collateral contacts.

     *  The IEVS data may show employment within the past 12 months. The Examiner must check with the participant and past employers.

     *  Employment Proof Includes:

     *  Past employer's records.

     *  State/local income tax records.

     *  State unemployment records.

     *  Bank loan information.

03.04413 -- 03.04414  RESERVED

EDUCATIONAL INCOME. Educational income includes deferred repayment educational loans, grants, scholarships, fellowships, and veterans' educational benefits. The school attended must be a recognized institution of post secondary education, a school for the handicapped, a vocational education program, or a program providing completion of a secondary school diploma, or equivalent. Title IV and BIA educational income is excluded. Expenses may be deducted from educational income not excluded. Proof of expenses must be provided. Educational income is computed using steps in Table 03.04415. (06-01-94)

(06-01-94)

NOTE: Do not deduct educational expenses from educational income when expenses are paid by another source.

EXAMPLE: Sam is a student receiving a scholarship. WIA paid his tuition. Sam is not allowed a tuition deduction from his scholarship because the tuition was paid by WIA. [1/1/06]

NOTE: If a participant was a student who had countable educational income prorated over an intended period then dropped out of school prior to the intended period, continue to count the prorated educational income until the end of the period.

TITLE IV EDUCATIONAL ASSISTANCE

NOTE:

Educational assistance authorized under Title IV includes the following:

     *  Basic Educational Opportunity Grants (BEOG or PELL Grants)

     *  Supplemental Educational Opportunity Grants (SEOG)

     *  State Student Incentives Grants (SSIG)

Federal Family Education Loan Program (Formerly GSL):

     *  Federal Direct Supplemental Loan Program for students

     *  Federal Direct Plus Program for parents

     *  Federal Direct Stafford Loan Program

 Federal Consolidated Loan Program

     *  Direct Loans to students in institutions of higher education(Perkins Loans, formerly NDSL)

     *  Presidential Access Scholarships (Super PELL Grants)

     *  Work Study Money and Title IV Education Assistance

     *  Trio Grants (for students from disadvantaged backgrounds):

            *  Upward Bound

            *  Student Support Services

            *  Robert E. McNair Post-Baccalaureate Achievement

     *  Robert C. Byrd Honors Scholarship Program

     *  College Assistance Migrant Program (CAMP)

     *  High School Equivalency Program (HEP)

     *  National Early Intervention Scholarship and Partnership Program

CARL D. PERKINS EDUCATIONAL INCOME

NOTE: Carl D. Perkins income is not Title IV educational assistance. Amounts available for tuition and fees and, for students attending an institution at least half time, books, supplies, transportation, dependent care, and miscellaneous personal expenses (other than room and board), are excluded from income.

Carl D. Perkins educational income includes:

     *  Indian Vocational Education Program

     *  Native Hawaiian Vocational Education Program

     *  State Vocational and Applied Technology Education Program which contains the:

              *  State Program and State Leadership Activities

              *  Program for Single Parents, Displaced Homemakers, and Single Pregnant Women

              *  Sex Equity Program

              *  Programs for Criminal Offenders

        *  Secondary School Vocational Education Program

        *  Postsecondary and Adult Vocational Education Program

        *  State assistance for Vocational Education Support

        *  Programs by Community-Based Organizations

        *  Consumer and Homemaking Education Program

        *  Comprehensive Career Guidance and Counseling Program

        *  Business-Labor-Education Partnership for Training Program

        *  National Tech-Prep Education Program

        *  State-administered Tech-Prep Education Program

       *  Supplementary State Grants for Facilities and Equipment and Other Program Improvement Activities

       *  Community Education Employment Centers Program

       *  Vocational Education Lighthouse Schools Program

       *  Tribally Controlled Postsecondary Vocational Institutions Program

        *  Vocational Education Research Program

        *  National Network for Curriculum Coordination in Vocational and Technical Education

        *  National Center or Centers for Research in Vocational Education

        *  Materials Development in Telecommunications Program

        *  Demonstration Centers for the Training of Dislocated Workers Program

        *  Vocational Education Training and Study Grants Program

        *  Vocational Education Leadership Development Awards Program

        *  Vocational Educator Training Fellowships Program

        *  Internships for Gifted and Talented Vocational Education Students Program

        *  Business and Education Standards Program

        *  Blue Ribbon Vocational Education Program

        *  Educational Programs for Federal Correctional Institutions

        *  Vocational Education Dropout Prevention Program

        *  Model Programs of Regional Training for Skilled Trades

        *  Demonstration Projects for the Integration of Vocational and Academic Learning Program

        *  Cooperative Demonstration Programs

        *  Bilingual Vocational Training Program

        *  Bilingual Vocational Instructor Training Program

        *  Bilingual Materials, Methods and Techniques Program

THE FOLLOWING IS HANDBOOK MATERIAL

03.04416 -- 03.04425  RESERVED

SELF-EMPLOYMENT INCOME. Net self-employment income is computed by subtracting allowable business expenses from self-employment earnings. Actual, not rounded, figures are used. (06-01-94)

DEFINITION OF SELF-EMPLOYMENT

Self-employment is the process of actively earning income directly from one=s own business, trade, or profession. Persons are considered self-employed if they:

     *  Are responsible for obtaining or providing a service or product.

     *  Earn income directly from their own business

     *  Are not required to have federal income tax and FICA payments withheld from their earnings.

     *  Are not required to complete an IRS W-4 form for an employer.

     *  Are not covered by workers' compensation.

Examples of self-employed individuals are grocers, storekeepers, crafts persons, fishermen, farmers, trappers, subcontractors, day-care providers, cosmetic sales representatives, persons providing and charging room and board, and persons that own and actively manage rental property.

NOTE:  Ownership of rental property is considered a self employment enterprise.  All self employment expenses attributed to owning the property are allowable costs of doing business.  Any balance, after subtracting any allowable expenses from monthly rental income, is considered the net profit of a self employment enterprise as long as monthly rental income is consistent with fair market rent for the location.

However, the net self employment income derived from the rental property is coded earned income only if a member of the household is actively engaged in the management of the property an average of 20 hours per week.  Otherwise, code the income as self employment unearned income.

NOTE: Partnerships and Corporations

Partnerships, Limited Liability Corporations (LLCs), and S Corporations are regarded under the law as artificial persons with income and debts independent of their members or shareholders.  Use appropriate legal or tax records to verify the type of business structure. 

With these types of businesses, expenses are taken out prior to disbursing profits.  Because of this, income from these businesses is not treated under typical self employment rules, and expenses are not allowed. 

In LLCs and S-Corps, be aware that officers often receive a separate disbursement of income for that status, in addition to their income for being a member or shareholder.  Disbursed income is treated as earned income.

If the disbursements come out less often than monthly, then average them over the period of time they are intended to cover.

If the participant has not taken any legal steps to turn their business into a Partnership, LLC, S Corp, assume it is a sole proprietorship and that normal self employment rules apply.  If it is not clear from the legal paperwork provided which type of business structure is involved, utilize your local DAG to assist in the identification of the business structure.

NOTE:

Ask households if they have any self-employment income. Self-employment income may be received in a lump sum, fluctuating, seasonally, or in the form of regular payments.

When the household has self-employment income, verify the income with the following documents:

     *  Recent tax returns or business records.

     *  Receipts for business income and expenses.

     *  Household's statement about estimated earnings.

EXAMPLE 1:

Ted babysits in his own home. He babysits the children of Patty. Ted provides lunches and snacks for the children. Ted, not Patty, must withhold taxes and make quarterly tax payments. Ted's babysitting income is from self-employment.

EXAMPLE 2:

Jane babysits a neighbor's child in the neighbor's home. The neighbor is withholding Social Security and income taxes and is considered an employer. Jane's income is from an employer and not from self-employment.

WHEN SELF-EMPLOYMENT INCOME MUST BE AVERAGED OVER TWELVE (12) MONTHS. Self-employment income, even if received within a short period, must be averaged over a twelve (12) month period if it is the household's annual support. The self-employment income, if it is considered annual support by the household, must be averaged over a twelve (12) month period, even if the household gets income from other sources in addition to self-employment. Self-employment income received on a monthly basis, which is a household's annual support, is averaged over a 12-month period. (06-01-94)

EXAMPLE:

Jake is a farmer and receives his income after he sells his crops. He usually receives two large payments yearly. Jake's income is averaged over 12 months.

AVERAGING SEASONAL SELF-EMPLOYED INCOME. Seasonal self-employed households get income from self-employment during part of the year. Self-employment income intended to meet the household's needs for only part of the year must be averaged over the period of time the income is intended to cover. (06-01-94)

EXAMPLE 1:

Hank applies for FS in July.  He sells refreshments at flea markets during June, July and August. He usually makes $900 self-employment income for the season. His projected self-employment income is $300 for each of the three months.  Hank's wife, Myna works year round as a secretary for a local company.  This is a Simplified Reporting household.  Because Hank's income is not used to support the household's needs for the entire year, count $300 for the application month (July) and $300 for the month after the month the application is processed (August).  Because at application, Hank reported and verified his seasonal income will end in August, end the income as of August 31st.

EXAMPLE 2:

Chuck is a fur trapper. He traps from October through March. Chuck sells his furs in April. He has no other income. Chuck indicates that his fur trapping income only lasts from April through October. Because Chuck has no other income, his income is covering the household's expenses for the year.  Chuck's income is averaged over the period of time the income is intended to cover, 12 months.

NOTE:  For applications, determine whether the household will receive income from the seasonal self-employment during the application month, the month the application is processed, or the month after the application is processed.  For recertifications, determine whether the household will receive income from the seasonal self employment in the first month of the new certification period.  If the household will receive income from self employment in one of these months, average the total amount received during the period of seasonal employment and count that amount for the month the income will be received.

EXAMPLE:

Billy has a beet truck and hauls beets for farmers in the fall.  Billy works as a mechanic at the Ford dealership all year.  Billy's wages as a mechanic are used to compute his Food Stamp benefits.  Billy receives income from beet hauling in September, October, and November in the amount of $1500.  The current certification period ends 9/30.  To determine the amount of income to anticipate for October (the first month of the new certification period) divide the total income expected during the season ($1500) by the number of months in the season (three - September, October, and November) = $500.  Count $500 for October.

Because Billy has reported and verified at recertification that his income will end 11/30, end the $500 beet hauling income as of 11/30 because it will cause the household's FS to increase in December.  The household does not have to report the loss of this income again.

EXAMPLE 3:

Billy has a beet truck and hauls beets for farmers in the fall. Billy works as a mechanic at the Ford dealer all year. Billy's beet hauling income is averaged over the fall months he is self-employed. His wages as a mechanic are used to compute his Food Stamp benefits throughout the certification period.

WHEN SELF-EMPLOYMENT INCOME MUST BE PROJECTED. If the household has a large increase or decrease in self-employment income, the self-employment income must not be averaged using past income. The Department must project self-employment income for the coming year using Table 03.04429. Add the net self-employment income to any other earned income received by the household. (06-01-94)

(06-01-94)

COMPUTING SELF-EMPLOYMENT INCOME. Procedures and rules for computing self-employment income are listed in Subsections 03.04430.01 through 430.04.  Self-employment income of households owning and operating a commercial boarding house is computed using Subsections 03.04430.01 through 430.04. Add the net self-employment income to any other earned income received by the household. (06-01-94)

(08-01-2001)

NOTE: Count the full amount of the self-employment capital gain as income for Food Stamps. The full amount is counted, even if only a percentage of the money is taxed for Federal income tax purposes. Capital gains will be annualized along with the other self employment income.

EXAMPLE:
Mom and Pop Bailey opened Mom and Pop's Doughnut Shop 25 years ago. At that time they purchased a doughnut making machine for $500. They just replaced the machine after selling their old doughnut making machine for $1200 to the Smithsonian for its pastry shop display. The Bailey's capital gain is $700. Add $700 to the Bailey's self-employment income before annualizing.

NOTE: When a vehicle is an integral part of a business activity subtract the cost for the standard mileage rate, as defined by the IRS.  As of January 1, 2006, the current standard mileage rate is 45 cents per mile.  Allow only costs incurred while conducting business.  Do not allow vehicle costs for personal use. (5-1-06)

NOTE: Key Point - Housing and utility costs are allowable as self-employment expenses, if they are specific to the business and are separate and identifiable expenses.  Participants who use part of their home to conduct their self-employment business are allowed to deduct part of the shelter costs and utilities as self employment expenses. 

Using a Tax Return – If there is a tax return; allow the amount the household has indicated on their tax return as shelter and utility costs associated with the self employment business. Also, allow the Food Stamp household’s verified shelter and utility expenses on HOEX/UTEX. 

Using Self-Employment Forms – If a household has not been in business long enough to file a tax return, allow the verified shelter and utility costs on HOEX and UTEX, but do not allow housing expenses as self employment expenses.  Only allow utility expenses that are separate and identifiable as a cost of doing business (self employment expenses). 

If expenses are specific and identifiable billed separately, such as a cell phone used solely for the business, allow the cost as a self-employment deduction. They cannot get the double deduction for one phone. If for example they have a separate business phone, allow the business phone bill as an expense. Allow the utility allowances for the Food Stamp household for their home phone on UTEX.  [1/1/06]

NOTE: The interest from that portion of charge card payments incurred to cover the cost of materials is an allowable cost of doing business.

COMPUTING NON-COMMERCIAL BOARDER INCOME. Income received from boarders, by a household not owning and operating a commercial boarding house, is computed using Table 03.04431. Add the net self-employment income from the boarder to any other earned income received by the household. (06-01-94)

(06-01-94)

NOTE:

Shelter costs paid directly by a boarder to someone outside the household are not counted as income to the household. However, when computing the Food Stamp household's shelter deduction, do not include shelter costs paid directly by the boarder to a third party, such as the gas or electric company.

EXAMPLE:

A boarder is charged $100 per month and must pay the household's electric heat bill each month. The boarder pays the electric company directly. $100 per month is income from the boarder. The Food Stamp household is not allowed a heat cost when their shelter deduction is computed.

AVERAGING FARM SELF-EMPLOYMENT INCOME. To be a self-employed farmer, the farmer must get or expect to get annual gross income of one thousand dollars ($1000) or more from farming. Self-employed farmers will have their income and income-producing expenses averaged over a twelve (12) month period. This average monthly income is used to compute the amount of the Food Stamp benefits. If the average income does not reflect actual income due to a large increase or decrease in business, the farm self-employment income must be calculated based on expected earnings. For a cash crop farmer, use the gross amount from the most recent crop sale. (06-01-94)

NOTE:

Average self-employment income received by farmers over a 12-month period if the income is used to support the farmer on an annual basis.

EXAMPLE 1:

A farmer's total yearly income is $12,000. He gets the income over a four month period. The $12,000 is the household's total yearly income. The average monthly income from self-employment is $1,000.

EXAMPLE 2:

A farmer's tax return for last year showed a total income of $10,000 before expenses. The farmer recently leased a neighboring property which he expects to increase his harvest by 10%. Do not average last year's income. Estimate the farmer's income before expenses by adding $10,000 plus 10% equaling $11,000. Subtract expenses before averaging this amount.

OFFSETTING FARM SELF-EMPLOYMENT LOSSES. If a farmer's cost of producing self-employment income results in a loss, the loss must be subtracted from other countable income in the household. First, subtract the loss from non-farm self-employment income. If any loss remains, subtract the remaining loss from the total of earned income. If any loss remains, subtract the remaining loss from the total of unearned income. Net losses from the self-employment income of a farmer are prorated over the year. (06-01-94)

TERMINATION OF FARM SELF-EMPLOYMENT INCOME. Where a farmer stops a farming operation during a certification period, remove the annualized income, expenses and loss for the remaining months in the certification period. (06-01-94)

THE FOLLOWING IS HANDBOOK MATERIAL

03.04435 -- 03.04499  RESERVED