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Page | 158 8701.4 ACCESS Entry of Self-Employment Income Each self-employment business, including capital gains and/or losses and partnership income, must be entered on a separate BUSI (or UNEA) panel on ACCESS. The DBUS panel will need to be completed in order for ACCESS to calculate self-employment income. Self-employment losses from self-employment gains, and farm/ranching losses from other income will automatically be calculated. Remember non-farm/ranching losses will only offset other self-employment income whereas Farm/ranching losses will be offset other income ONLY if the annual farm/ranching income is at least $1000.

Corporation dividend income is not entered on a BUSI panel, it is entered on a UNEA panel coded “7”. For rental self-employment, the income is entered on a BUSI panel using “R.”

See Appendix 4 for instructions on how to enter Self-employment in ACCESS.

8701.5 Simplified Self-Employment Calculation Process The simplified calculation process is completed by taking each business’ gross self-employment income times 45%. If the income is from farming/ranching, lump sum crop insurance payments and all disaster payments are then excluded. (If the crop insurance payment is paid more than once a year, the income is countable thus it is not excluded in the calculation.) The simplified calculation is used for most self-employment business income UNLESS the self-employment business doesn’t report at least one allowable self-employment expense or the household requests that actual self- employment expenses be used.

A survey of self-employment income and expenses revealed that an average of 55% of self- employment income is offset by self-employment expenses. Therefore, the simplified process automatically provides households a self-employment expense deduction of 55% of their self- employment (multiplying the gross income x 45% provides the automatic 55% expense deduction). Households should be encouraged to use actual self-employment expenses if their net self- employment income is a loss under SNAP budgeting procedures. Households whose net self- employment income shows a loss after deducting allowable expenses from income on monthly ledgers should also be encouraged to claim actual expenses.

Example 1 (Farm/Ranch Self-Employment Loss Can Offset Earned Income): Todd and Tammy apply for SNAP with their 4 children. They are self-employed farmers, Todd also works for the local school district. Their tax return shows the farm made over 40,000 for the year, but when ACCESS calculates their actual monthly income, the farm shows a 2,000 loss each month. Todd earns 3,500 a month from the school. Because farm and ranch losses can offset other earned income, ACCESS subtracts the 2,000 loss from Todd’s 3,500 wages, leaving 1,500 countable income per month. Example 2 (Non-Farm Self-Employment Loss Cannot Offset Wages): Paul and Pearl apply for SNAP. Paul owns a repair shop, Pearl works at a grocery store. Paul’s business shows over 35,000 in annual earnings, but his actual monthly income shows a 1,500 loss. Pearl earns 2,250 a month at the grocery store. Because Paul’s self-employment is not farm or ranch income, his 1,500 loss cannot be used to offset Pearl’s wages. Pearl’s full 2,250 counts. Example 3 (Self-Employment Losses Can Offset Other Self-Employment Income): Sam and Sally apply for SNAP with their 2 children. Sam sells insurance and has a monthly profit of 3,500. Sally makes and sells blankets. Her business earned 10,000 for the year, but her actual monthly income shows a 1,500 loss. Because both incomes are self-employment, ACCESS can offset Sally’s 1,500 loss against Sam’s 3,500 profit.