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MS 5300

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Volume 2 - Supplemental Nutrition Assistance Program (SNAP) MS 5300 – R. 8/1/12 – OMTL – 425 Types of Self-Employment Income

Self-employment is defined as income from which no taxes are withheld prior to the receipt of income. The following are types of self-employment enterprises:

A. Households that receive regular income from self-employment: These households receive income as profit on a regular schedule (weekly, monthly) or receive a certain amount from the business each week or month and may draw the balance of profit from the enterprise at the end of the business year. The self-employed in this category include households who receive their income from leases and/or rental property, small businesses such as grocers, or some farmers, such as dairy farmers.

B. Households in a service-type business: These households receive income on a frequent basis, yet many times the employment and receipt of income will be sporadic in nature. These households include craftsmen, certain repairmen, or franchise holders who work out of their homes.

C. Households deriving income from short-term, seasonal, self-employment: Calculation of monthly income depends on whether the self-employment provides the household's support for the entire year or if the income is only for a seasonal period of time and the household has other sources of income during the remainder of the year. Seasonal self-employment includes vendors who work only in the summer or tourist season, certain seasonal farmers or fishermen, etc.

Farm workers for whom taxes are paid by the employer are considered self- employed. If the employer pays the farm worker's taxes at the end of the year, contact the employer to determine what the future payment arrangement will be. If the employer is going to pay the taxes on an ongoing basis, the taxes are included in the gross income and annualized with all other self-employment income. If the tax payment is paid one time only, consider the payment a resource in the month of receipt.

D. Cash-crop farmers: Households that receive their annual income from self- employment in a short period of time and who must control their expenditures so that these funds cover their expenses for the next 12 months. Included in this category are cash-crop farmers and some seasonal farmers, where the seasonal income is the household's primary support for the year. Cash crops include tobacco pounds, which are sold, not rented or leased.

E. For farmers receiving recurring annual Tobacco Settlement Agreement payments, consider the income as follows:

1. Prorate Tobacco Settlement payments over a 12-month period for the following SNAP benefits recipients.