2000.1 Overview

Self-employment income is earned directly from a business or profession, rather than a specified salary or wages from an employer. A self-employment business exists when there is no employer/employee relationship. Tax and Social Security payments are the business owner’s responsibility. Examples include, but are not limited to: independent contractors, landscapers, dependent care providers, newspaper carriers, farmers, landlords, etc.

Income received from a Partnership is self-employment income.

Income received from a Corporation is self-employment income. Wages and profits paid from a corporation follow normal wage and dividend income calculations.

Self-employment income is generally reported on income tax forms. See income tax forms. Follow the Procedural Handbook for Determining Self-Employment Income Using Tax Forms . If tax forms are not filed, determine the income from the: business accounts, bookkeeping records, sales and expenditures records, or other records maintained by the business owner that allows a calculation of the income and expenses.