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305.3 TANF MANUAL 10/22 Page 14

305.3 EARNED INCOME - Earned income is defined as income earned by an individual through the receipt of wages, salary, and/or commissions, or through profit from activities in which he is engaged as a self- employed individual.* Earned income includes pay for jury duty, severance pay, and vacation pay. Sick/disability pay from the employer or from employer obtained insurance is counted as earned income as long as the payment is made directly from the employer to the employee. If the payment is made from the insurance company to the employee, the income is counted as unearned income.

Note: income received from a supplemental sickness or disability insurance policy that was obtained solely by the employee (and payments are issued directly from the insurance company to the employee) will be counted as unearned income.

Self-employment is defined as a business, farming or commercial enterprise in which the individual receives income earned by his own efforts, including his active engagement in management of property. Income from property when the individual is not actively engaged or when no managerial responsibilities are involved is not considered earned income.** In addition, for TANF purposes, self-employment situations include, but are not limited to, domestic workers, companion service providers, and child care providers.

Example: Income from DoorDash, Uber, Instacart and other similar roles are considered self-employment income and must be treated as such for purposes of determining eligibility for TANF. Individuals providing services under such company names receive 1099s and have to account for their own taxes, determine their own hours and are responsible for their business related expenses such as gas, vehicle maintenance and etc. that would be considered self-employment expenses.

Contract earnings are defined as wages guaranteed by a contract. This does not include work on an hourly or piecework basis or self-employment. A guaranteed wage is one which is received by an individual employed on a contractual basis and paid over a period of time. Earnings of this nature will be prorated according to 305.1.B.2.a.4.

When income is received from property, the eligibility case record must clearly indicate the basis for determining whether or not the individual produces it by his own efforts or whether or not he is actively engaged in management.

There are differences in the provisions for counting U.S. Census Bureau income paid to census workers depending on the source of the income. Income paid directly to the employee by the U.S. Census Bureau is not countable. Earnings received from temporary employment agencies or third party entities are countable.

Virtual Currency is defined in the Code of Virginia* as an electronic representation of value intended to be used as a medium of exchange, unit of account, or store of value. Virtual currency does not exist in a physical form; it is intangible and exists only on the blockchain or distributed ledger associated with a particular virtual currency. The owner of virtual currency holds cryptographic keys associated with the specific unit of virtual currency in a digital wallet, which allows the rightful owner of the virtual currency to access and utilize it. Virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency, is referred to as convertible virtual currency. Cryptocurrency is a type of convertible virtual currency. Bitcoin is an example of cryptocurrency.

Cryptocurrency and any other types of convertible virtual currency will be countable earned income if the following applies: 1. Cryptocurrency or any other types of convertible virtual currency is received as wages from an employer. 2. Cryptocurrency or any other types of convertible virtual currency is received in the form of income through an exchange for services rendered or goods provided through self- employment (See 305.3).

Note: To determine the equivalency of virtual currency to real currency, the fair market value of the virtual currency in United States dollars must be used as of the date payment is received.

* Code of Virginia, Section 6.2-818.1

TANF Transmittal 75