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E-120.1 Division of Welfare and Supportive Services MAGI BUDGETING Medical Assistance Manual Self-Employment 22 Jul 01 MTL 03/22

self-employment income.

Client statement of gross self-employment income can be accepted when the gross amount (before expenses) is under the income limit for the household size. When the gross self-employment exceeds the income limit, but the net income (after expenses) is under the income limit for the household size request verification of self-employment.

E-120.2 Verification of Self-Employment

If the household has had self-employment income for the past year:

1. Use the adjusted gross income figures from the previous year’s tax return.

• Add to the adjusted gross income any: RSDI benefits received; Foreign income received; Any tax-exempt interest received.

2. If the current income appears to be substantially different from the previous year, use more current information, such as updated business ledgers or day books.

Determine net self-employment income by subtracting allowable costs of producing the income such as identifiable costs of labor, sales tax, stock, raw materials, seed and fertilizer, advertisement, insurance premiums, utilities, repairs that maintain income-producing property, supplies, fuel, linen service, property tax and interest paid to purchase income-producing property.

Note: Cost of labor may include wages paid to the business owner. This expense is countable as both an expense to the business and earned income to the business owner. Fuel expenses are not allowed without a detailed mileage record/log or other documentation showing beginning and ending mileage, destination, which supports the expense. The current state mileage rate is used to determine fuel expense. Documentation acceptable to the IRS is acceptable to the Division.

If the household has not had the self-employment income for the past year average the income over the period of time the business has been in operation, and project that income.

3. Form 2011, Self-Employment worksheet completed by the client with receipts and records may be used.

Note: Uber/Lyft and other rideshare drivers are required to keep detailed records of any mileage or expenses related to their business (refer to manual section E-300).

E-125 UNEARNED INCOME

Unearned income is income received without performing work-related activities. It includes benefits from other programs.

Regular unearned income deposited directly into a financial institution is considered received in the month for which it is intended to be received.