9074.3 Food Stamp Self-Employment Charts

Types of Self- Employment Business Sale of Goods Storefront business Examples: Gift/craft shop, restaurant, gas station, florist Potential Deductions Cost of maintaining storefront – i.e., rent, insurance, utilities, property taxes. Payments on purchase of income producing equipment/property. Employees’ labor costs. Cost of supplies and goods sold. Advertising costs. accounting/legal fees. Licensing fees. professional/union dues. mileage/transportation necessary to produce/ continue income. Verifications Gross non-exempt income shall be verified. Special Considerations When business is transacted in cash, a paper trace (written verification) should be secured and presented by self-employed client. Verification that is not in writing must be fully documented. Income and costs of doing business, that have been mingled with regular household funds, must be verified to be separate and related to business. Computation Considerations Gross Receipts’ Cost of doing business. If income represents annual income, annualize over 12 month period. If income received monthly and is annual support, annualize over 12 months if accurate reflection of earnings – otherwise use anticipated earnings. If business less than 1 year old, average income for months and project over certification period. In-Home Business. Examples: tupperware sales, Avon sales, manufacturer’s rep., farmer, craft, sales Prorated share of utilities, taxes, insurance and maintenance if space used exclusively for business, Payments on purchase of income producing equipment/property. Employees’ labor costs. Cost of supplies and goods sold. Advertising costs. Accounting/legal fees. Licensing fees. Professional/union dues. Mileage/transportation necessary to produce/ continue income. When obtaining amount of non-exempt self-employment income, all business costs must be verified in order to be allowable deductions. Verified by: gross receipts, invoices, daily/monthly ledgers, canceled checks, bank statements, tax receipts, Schedule C of tax return, Schedule K or 1065 (for partnership). Depreciation on property and equipment is not an allowable deduction. Sale of Services Store-front business. Examples: Beauty shop, cleaning company, real estate/insurance. (Same as deductions for store-front business for sale of goods). Cost of doing business must be verified as separate from household costs. In-Home Business. Examples: Truckers, odd jobbers, seamstress, musicians, beauticians, daycare. (Same as deductions for store-front business for sale of goods). For partnerships, see partnership agreement or contract to determine proportionate share. For partnerships: Gross receipts/cost of doing business divided by proportionated share partnership liability. Types of Self- Employment Room and Board 1. Roomer Potential Deductions Same as in-home business Verifications Signed statement of each roomer. Cost of doing business must be verified. Special Considerations Cannot be siblings or parents/children living together unless elderly or disabled. Computation Considerations Boarder (3 or more meals per day.) B. (2 or less meals per day.) If payment is equal to or greater than the appropriate maximum food stamp allotment for the boarder group. subtract maximum food stamp for boarder group allotment or actual documented cost of providing meals, if actual costs exceed food stamp allotment. If payment is equal to or greater than the appropriate 2/3 food stamp allotment for boarder group: subtract 2/3 maximum food stamp allotment or actual documented cost of providing meals, if actual costs exceed 2/3 of food stamp allotment. Signed statement of each boarder stipulating amount paid and number of meals provided per day. Gross non-exemption income shall be verified. When obtaining amount of non-exempt self-employment income, all business costs must be verified in order to be allowable deductions. Verified by: Gross receipts, invoices, canceled checks, daily/monthly/ledgers, bank statements tax receipts, Schedule C of tax return, Schedule K or 1065 (if partnership). Cost of doing business must be verified as separate from household costs. Cannot be siblings or parents/children living together. If payment is less than the appropriate maximum food stamp allotment for the board group – payment is not income. Boarder is not a boarder. He is considered a member of FS household and his whole income must be considered. If payment is less than 2/3 of the appropriate food stamp allotment for the boarder group, payment is not considered to be income; boarder is considered to be member of FS household and his whole income must be considered. Commercial Boarding Home A commercial establishment which offers meals and lodging for compensation with intent of making a profit. Identified costs necessary to produce and continue income. Notes 1, 2, & 3 under "computation considerations" for businesses also could apply to commercial boarding home. Rental Property Resident Management owners reside in portion of rental property. Prorated share of taxes, utility bills, maintenance, insurance costs. (Proration is based on total square foot of rented area). Utility bills, receipts which verify separate identifiable costs. Non-resident Management – Owner resides separate and apart from rental property. All expenses other than depreciation and mileage. Tax receipts, bank statement of mortgage interest, utility bills, receipts/canceled checks. Member of household must average 20 hours per week actively engaged in management of rental property. Otherwise consider as unearned income. If unearned income – not eligible for earned income deduction.