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SNAP CERTIFICATION MANUAL – SECTION 5000 5600 Self-Employment Income 5660 Determining Self Employment Income

Under the Payment-in-Kind (PIK) program, farmers receive commodities from the U.S. Department of Agriculture, Commodity Credit Corporation (CCC). The household receives no income until the grain is sold. If the commodities are expected to be sold during the year, the anticipated income must be included as self-employment income. The CCC may also pay farmers in the form of commodity certificates for land diversion or acreage reduction. The certificates may later be surrendered to the CCC for cash or for commodities, or the farmer may sell the certificates to someone else, usually for a profit. The certificates are valued in dollars. When the certificates are used, the farmer receives cash or commodities based on the price of the commodity at the time the certificate is used. Cash received under this program is counted as income in the year it is expected to be received. PIK payments counted as income are annualized. The value of commodities the farmer intends to use as feed or seed is excluded as income. If the farmer intends to hold the certificate or commodities for longer than one year, the value of the commodities is counted as a resource. A farmer may sell commodities they own to the CCC and receive them back from CCC as PIK commodities. The CCC pays farmers for the commodities with the payment being used to repay price support loans previously extended to the farmer by CCC. These sale and loan payments should be treated as separate transactions from the receipt of CCC certificates or PIK commodities and should be handled as any other sale of commodities and repayment of a price support loan. Federal Crop Insurance Corporation (FCIC) Payments The farmer must pay a premium to be covered by the FCIC. Payments from the FCIC are excluded as a non-recurring lump sum payment. Crop Insurance Payments / Private Company Payment Crop insurance payoffs from private companies are excluded as income if received in a lump sum payment. Payoffs received in installments are counted as income.

5660 Determining Self-Employment Income SNAP Manual 01/01/00 Self-employment income is all proceeds from the sale of goods or for services rendered by the self-employed individual plus any capital gains less the costs of producing the income. The form Statement of Self-Employment (DCO-226) will be used to calculate self-employment income from operations other than farms. The form Income from Farm Operations (DCO-227) will be used to calculation self-employment income from farms.