75-02-01.2-50 Earned income considerations.

1. Earned income must be verified and documented in the case record. Earned income may be received from a variety of sources. 2. Net earned income is determined by adding monthly net income from self-employment to other monthly earned income and subtracting the applicable deductions and disregards. 3. Except as provided in subsection 4, monthly self-employment income is determined as follows: a. Monthly self-employment income is one-twelfth of the business or farm income calculated from the net profit of an individual's income tax forms and schedules, plus gains or minus losses related to self-employment business that are expected to continue during the current year, minus any type of income that must be considered unearned income, and minus expenses with the exception of depreciation and depletion. b. For a business that has been operating for less than a full tax year, monthly self-employment income is the gross income from the individual's income tax forms and schedules, plus gains or minus losses related to the self-employment business that are expected to continue during the current year, minus any type of income that must be considered unearned income and minus expenses, with the exception of depreciation and depletion, divided by the number of months the business has been in operation. c. In the case of a business that furnishes room and board, monthly gross receipts less one hundred dollars per room and board client. d. If the most recent available federal income tax return does not accurately predict income because the business has been recently established, because the business has been terminated or subject to severe reversal, because the applicant or recipient makes a 35 convincing showing that actual net income is substantially less than the amount determined, because the individual has not filed an income tax return, or because the human service zone determines for any reason that actual net profits are substantially greater than the amount determined based on the most recent available federal income tax return, an amount determined by the human service zone to represent the best estimate of monthly net income from self-employment must be used. If the most recent available federal income tax return is not used or if the individual did not file a federal income tax return, the self-employed individual shall provide the best information available on income and expenses. Income and expense statements, when available, must be used as a basis for computation. 4. If earnings from more than one month are received in a lump sum payment, the payment must be divided by the number of months in which the income was earned, and the resulting monthly amounts are attributed to each of the months with respect to which the earnings were received. 5. Income received on a contractual basis is allocated equally to each of the months covered by the contract, regardless of when the contract payments are actually received, and is deemed available to be received in the months to which income is allocated. 6. The standard employment expense allowance recognizes all costs associated with employment, including transportation, uniforms, social security contributions, and income tax withholding. This standard allowance applies to adult household members and nonstudent dependent children who are employed either full time or part time. 7. The standard employment expense allowance is the greater of one hundred eighty dollars or twenty-seven percent of gross earned income per month. This standard employment expense allowance applies to all individuals who receive an employment expenses allowance, including stepparents and parents of minor parents. History: Effective December 9, 1996; amended effective January 1, 2003; January 1, 2014. General Authority: NDCC 50-09-02, 50-09-25 Law Implemented: NDCC 50-09-02