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SNAP CERTIFICATION MANUAL – SECTION 5000 5600 Self-Employment Income 5664 Calculating Net Self employmentIncome utilities for the remainder of the residence will be allowed as a shelter cost. If the household is otherwise entitled to use the utility standard, the household may elect to do so. • If the utilities are not measured and billed separately, the householdmay: 1. Allow all utility costs as a cost of producing the self-employment income; or 2. Allow all utility costs as a shelter cost; or 3) allow the household to prorate the utility costs between the cost of producing the self-employment income and the shelter cost. 5664 Calculating Net Self-employment Income SNAP Manual 01/01/00 To calculate net self-employment income using a form DCO-226 or DCO-227: • Total the gross receipts from the business during the selectedperiod. • Exclude the cost of producing the income. • If the selected period is one year, annualize the net income by dividing the net income by 12. If the selected period is less than one year, average the net income by dividing the net income by the number of months in the selected period. If there is a profit, the net self-employment income will be used to determine the household’s gross SNAP income. Losses will not be deductible unless the self-employment enterprise is a farming operation. See SNAP 5670 for a definition of a farming enterprise and an explanation of deducting losses. 5664.1 Separate Enterprises SNAP Manual 01/01/00 When self-employment is derived from two or more separate enterprises with no farm operation involved, the gross income and allowable costs from each business will be combined to calculate the net self-employment income. When one of the enterprises is a farm, the county office worker must complete the following steps: 1. Determine the gross income from the farm operation. 2. Determine the allowable costs of producing the farm income. 3. Exclude the allowable costs from the gross income.