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Title 7: SNAP Page 49 Iowa Department of Health and Human Services Employees’ Manual Chapter I: Specific Households and Participants S-Corporations and Limited Liability… Revised February 13, 2026

S Corporations and Limited Liability Corporations (LLCs) Legal reference: 7 CFR 273.11(a) S corporations and LLCs are “pass-through” entities for tax purposes. The income of the business is passed through to the owners and reported on the owner’s personal income tax return. This income is countable regardless of whether it is being distributed to the household. Any wages paid to the officers would be treated the same as wages to an employee of any company and would be countable in the month received. Additionally, annualize other income of the S corporation or LLC, such as royalties, and count that as earned income to the household. The income from these types of corporations should be treated as regular earned income, not self-employment income. They are entitled to the earned income 20% deduction, but not to additional deductions and expenses that would be allowable for self-employment. Furthermore, since these are not self-employment:  There are not “losses” from these enterprises and  Losses from a true self-employment enterprise cannot be used to offset the profits of the S corporation or LLC. NOTE: If a single-member LLC does not elect to be treated as a corporation, the LLC is a “disregarded entity” and eligibility would be determined in the same manner as a self-employed individual. Fleeing Felons and Parole and Probation Violators Legal reference: 7 CFR 273.1, and 273.11 A person who is fleeing to avoid prosecution, custody, or confinement for a felony or who is in violation of a condition of probation or parole is ineligible to participate in the SNAP program. There are specific requirements that must be met before a person can be considered a fleeing felon. It’s rare for someone to meet all the criteria to be canceled. Workers must contact Policy Support to ensure all requirements have been met before taking action to cancel someone who appears to meet fleeing felon criteria. To establish that an individual is a fleeing felon, all following four requirements must be true: 1. There is an outstanding felony warrant for the individual by a federal, state, or local law enforcement agency, and the underlying cause for the warrant is for committing or attempting to commit a crime that is a felony under the law of the place from which the individual is fleeing or a high misdemeanor under the law of New Jersey;