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305.3 TANF MANUAL 7/19 Page 15

3. Profit from self-employment means the total income received, less the business expenses directly related to producing the goods or services and without which the goods or services could not be produced.* However, business expenses do not include:

a. net losses from previous periods;

b. federal, state, and local taxes;

c. money set aside for retirement purposes;

c. personal expenses, entertainment expenses, and personal transportation;

d. depreciation of equipment, machinery, or other capital investments necessary to the self-employment enterprise.

Note: If an individual who was self-employed incorporates his business, either by himself or with another individual, he is no longer considered self-employed. His wages or salary will be paid by the corporation and will be considered regular earned income, not self-employment income.

B. Disregarded Earned Income - As specified below, certain earned income of members of the assistance unit and excluded individuals required to be in the assistance unit must be disregarded in determining need of the assistance unit and amount of assistance to which the assistance unit is entitled. In addition, income disregarded under the provisions of other federal assistance programs must not be counted as income to the TANF assistance unit. The items listed below are disregarded during the maximum allowable income screening. Income disregards are to be applied to gross earned income in the order listed below.

1. All payments issued under the Workforce Innovation and Opportunity Act (WIOA), including Job Corps payments,** to a student who is under age 18 or, if age 18, is a full-time student.

2. Other earned income of any eligible child who is a student* must be disregarded in the maximum allowable income screen, determination of need (for applicants) and payment computation.

* 22 VAC 40-295-60 ** Public Law 105-220

TANF Transmittal 66