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1. Self-employment Enterprise Exists for Less Than a Year When the self-employment enterprise is less than a year old the individual may not have a prior year’s tax record to use as verification.

When the business is at least three (3) months old, a monthly adjusted gross income is estimated using the income and expense records submitted for the three (3) months prior to the month of application, and any estimated changes to the income based on the individual’s statement, by: a. Adding the gross income, including tips, listed for each month together; b. Adding the total allowable business costs for each month together; c. Subtracting the total business costs from the totalgross income; and d. Dividing that amount by the number of months the information was provided for.

If the income is received less than monthly, the estimated annual allowable business costs are subtracted from the estimated gross income and prorated according to 4080-2 J. 4. Prorating Self- Employment Income.

When the business has not yet been in operation for three (3) months, a monthly adjusted gross income is estimated using the income and expense records for the period since the business began. If the period is less than a month, it will be necessary to determine an average week's adjusted gross income then multiply by the conversion factor of 4.3 to determine an average monthly adjusted gross income.

If the business has not yet generated any income or the income doesn't meet the minimum wage comparison for the hours reported, this self-employment is not an eligible activity.

The monthly or prorated monthly adjusted gross income is then compared to the monthly amount estimated the individual would make when converted to an hourly rate, based on the number of hours worked at the self-employment enterprise, or full-time work based on a forty (40) hour work week at the current minimum wage. The conversion factor of four point three (4.3) must be used to determine the family’s monthly income based on the minimum wage.