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Low Income Home Energy Assistance Program Division 10 Service 415 Program 415 Chapters 05 - 65 North Dakota Department of Health and Human Services

Treatment of Self-Employment Income 415-25-05-27-15 (Revised 10/1/15 ML# 3453) View Archives

When an individual is actively engaged in a self-employment business, the income they receive is considered earned income. The following types of income are always considered earned income: • Capital or Ordinary Gains/Losses • Farm Income • Business Income • Partnership – Ordinary income, guaranteed payments to partners, depreciation and depletion However, there are some types of income included on the self-employment income tax forms that are considered unearned income. The following types of income are always considered unearned income: • Royalty income • Partnership – rental, interest and dividend income • Income from S-Corporations • Estate or trust income The following types are considered earned or unearned depending on whether the individual is actively engaged in earning the income and the self-employment tax forms filed. • Cooperative distributions from the sale of goods • Farm rental income • Other rental income The earned income must be separated from the unearned income and will be when using the self-employment calculation worksheet.