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Title 7: SNAP Page 68 Iowa Department of Health and Human Services Employees’ Manual Chapter I: Specific Households and Participants Self-Employed Households Revised February 13, 2026 Income

Household 3 Business X Earned Income Business Y Earned Income Business Z Unearned Income Gross Income $ 30,000 $ 12,000 $ 15,000 Expenses - 29,000 - 6,000 - 20,000 Profit/Loss $ 1,000 $ 6,000 $ (5,000) $ 1,000 Earned Business X $ (5,000) Unearned Business Z + 6,000 Earned Business Y + 7,000 Earned income $ 7,000 Earned income $ 2,000 Prorate and apply 20% deduction After any offsetting is done, if the income from self-employment is still a loss, consider this income to be zero. Do not offset a loss from self-employment income against other sources of earned or unearned income. EXCEPTION: A self-employed farmer can also offset a farm loss against any other countable income. See Offsetting a Farm Loss Against Other Countable Income for more information. Determining Assistance Legal reference: 7 CFR 273.11(a) Either annualize self-employment income over a 12-month period or consider it on a seasonal basis. When self-employment income is intended to meet the household’s need for only part of a year, average it over the period of time it is intended to cover. For example, when self-employed vendors work only in the summer and supplement their income from other sources during the balance of the year, average the self-employment income over the summer months, rather than over a year. The following sections explain:  How to annualize income and expenses.  How to count capital gains with annualized income.  When to use even and uneven proration of income in calculating benefits. Annualized Income and Expenses Legal reference: 7 CFR 273.11(a)(1) When self-employment income represents the household’s annual income, prorate it over 12 months. Do this even if the household:  Receives the income within a short period during that 12 months, or  Has other income in addition to the self-employment.