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FOOD AND NUTRITION SERVICES CERTIFICATION INCOME AND RESOURCES FNS 315 SPECIAL BUDGETING

18 Section 315 Change #01-2022 January 11, 2022 2. ‘S’ and ‘LLC’ corporations: If the business is incorporated as a ‘LLC’ or ‘S’ corporation budget the income the same as self-employment income. • Unlike the income from other corporations, which is reported to the IRS through separate corporate income tax returns, the income of these corporations is reported together with the household’s other income on its tax return. Accordingly, income from these corporations would be treated as self-employment income and annualized. 3. ‘C’ corporation: If the business is incorporated as a ‘C’ corporation do not use self-employment budgeting, count income received from the business as wages. • Income of a ‘C’ corporation is countable to a shareholder only if it is distributed to a shareholder. • ‘C’ corporation assets are not countable to the household but stock which represents the value of non-income producing corporate property is not excluded. • Corporate assets such as but not limited to vehicles, real estate, and equipment should be registered clearly in the name of the corporation. Otherwise, these would be considered property of the household and counted or excluded as appropriate. • Checks made out for cash or household expenses paid from corporate checking accounts should be considered “distributions” and counted as earned income. • The percentage of shares of stock which represents the value of non- income producing property owned by the corporation could be determined and counted as a resource. B. Records of Self-employment Records containing the total business income (including business invoices and accounts receivable) and business expenses (allowable costs of doing business) are essential to determine eligibility and correct benefit level. Tax forms and accounting methods vary widely, and it is impossible to specify forms, line numbers, or types of verification. Accept any verification that reasonably verifies the required information. Use the following guidelines for requesting verifications: 1. Request the previous year’s tax records (Form 1040 and all Schedules to show the business income and expenses) when they are representative.