f. Specific Requirements for Self-Employed Family Members
Child care assistance shall be approved to support a self-employment activity only if the activity is carried on to create a livelihood and in good faith to make a profit as evidenced by business and financial records and tax returns. The parent shall be required to provide documentation of continuous activities that are not passive or casual, or more appropriately associated with a hobby or volunteer work. Family members who own multiple or multi-family properties shall not be considered self-employed unless the individual actively manages the properties and can demonstrate work hours that justify the need for care.
Parents working at home as child care providers shall be considered available to provide care for their own children during their work hours, except under the following conditions: if the parent is a licensed family day care home provider; and if caring of his or her own children would cause the parent to exceed the licensed capacity established by the Department of Public Health.
The self-employment business activity shall be producing some taxable income at the time assistance is requested as reported as net profit on Schedule C of IRS form 1040. After six months, the taxable earnings for each family member involved in the activity shall equal or exceed the state minimum wage times the number of hours the family member purports to be working on the activity on a continual basis. Child care needs related to the activity shall be disapproved if income from the activity does not meet the income standards. Any subsequent requests for assistance made by the family related to self-employment shall be approved only if the gross taxable income produced equals or exceeds the state minimum wage times the number of hours each family member spends working on the activity.
The parent shall be responsible for submitting tax returns, estimated tax filings and business records documenting the income, business deductions and hours of participation where appropriate. Upon request, families with reported income that does not appear sufficient to meet basic daily living expenses shall provide verification of how the expenses are being met, including checking account, savings or loan records or an alternate means of financial support. The gross income from the self-employment business activity shall be used to determine eligibility and the amount of assistance if the information submitted by the parent is not sufficient to adequately determine the net profit.