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SNAP CERTIFICATION MANUAL – SECTION 5000 5600 Self-Employment Income 5663 Costs of Producing Self Employment Income

The following items WILL NOT be considered costs of producing self-employment income: • Payments on the principal (but not the interest) portion of payments on business or operating loans or payments on income producing real estate and capital assets like equipment, machinery or other durable goods. • Expenses and net losses from previousyears. • Federal, state and local income taxes. • Money set-aside for retirement. • Work related personal expenses such as transportation to and from work. • Depreciation. • Penalties and fines. • Charitable contributions.

5663.1 Rent or Mortgage, Taxes and Insurance Payments as Costs of Producing Income SNAP Manual 01/01/00 If the household’s home is on property connected to the property used for the self-employment enterprise, the county office worker must determine if the household’s shelter costs can be separated from the costs of doing business. If necessary, proration may be used to determine the amount of the payment on the property attributed to shelter costs. This calculation may be based on information from a mortgage lender, real estate tax records, Farmers Home Administration (FHA) documents, insurance premiums, etc. EXAMPLE: A household submits a loan agreement for the purchase of a dairy farm and house. The monthly payment is $1,500. The portion of the payment attributed to the dairy farm is $1,000. The portion of the payment attributed to the house is $500 or 33% of the total payment. The remainder of the payment will be excluded as a cost of producing the self-employment income. This percentage may be applied to taxes and insurance costs if no better information is available. If the costs of rent or mortgage (or interest on the mortgage), insurance, taxes and interest cannot be separated, these costs will neither be allowed as a shelter cost nor as a cost of producing the self-employment income. If a household uses part of the residence such as a room or a separate apartment solely for the self-employment operation, the county office worker will, at the household’s discretion either: • Include all of rent or mortgage, taxes and insurance as sheltercosts; OR