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Exclude the following when determining net self-employment income: ACA: Disaster payments. ABD and Family Med Needy: 1. Federal gasoline tax credit 2. State gas tax, 3. Disaster payments (see CMA 501-1 Unearned Income), 4. Crop insurance payments, and 5. Capital gains. EXPENSES: Allowable Expenses include: 1. Business transportation costs. If mileage is tracked, the Federal expense rate is used; if mileage is not tracked, allow fuel, vehicle repair and maintenance costs. NOTE: Only one expense method (Federal expense rate or vehicle repairs, maintenance, and fuel costs) may be allowed for a vehicle for the specified period. 2. Depreciation; 3. A 7.65% deduction for the ‘employer-paid’ portion of Social Security taxes is allowed when determining net self-employment income. This expense is manually calculated and entered into the system. 4. Meals and entertainment costs Other expenses allowed include: labor paid to individuals not included in the filing unit, materials, seeds, supplies, plants, fertilizer, interest payments on business loans, business portion of home property, repairs, etc. NOTE: Supplies are generally items that will be used up or consumed in the business, and include small tools, paper, pencils, scissors, gas, oil, envelopes, shampoo, crayons/coloring books, etc. Deduct allowable expenses when determining net self-employment income. Most costs of doing business are allowed, and the amounts listed on the income tax forms are acceptable verification, unless the client expects their income to change. The expenses must be current and are only allowed when paid, not when incurred. NOTE: Expenses expected to be due and payable in the prospective period can be anticipated when calculating income for a new self-employment business or one experiencing a significant change. To qualify for the Earned Income Tax Credit, some self-employed individuals may not claim all expenses on their Schedule C. Allowable expense not listed on the Schedule C can be verified and used to accurately determine countable self-employment earnings. Determining Cost of Dependent Care Meals: Self-employed dependent care providers (day care for children, elderly or disabled individuals) may choose one of the following methods to determine cost of meals provided to those they care for: 1. Actual documented meals; 2. A standard per day amount based on estimated meal costs; or 3. Current reimbursement amounts used in the Child and Adult Care Food Program.