Page 51

50

PY26 WHEAP Manual

Revised: August 2025 Self-employment income losses may not be offset by wages, interest income, government program benefits, self-employment income reported on the S-GIRF, or income reported on a 1099 (independent contractor).

NOTE: For the purposes of calculating income, ownership and management of rental property and royalty income are considered self-employment income and this income is entered in the HE+ System as “Rental Income.”

Net operating loss (NOL) reported on line 8a of Schedule 1 shall be ignored and not used to offset any profit of self-employment income reported on the Schedule 1. See definitions in Chapter 1 for more information on NOL.

3.3.5.1 Verification of Income − Self-Employment Income The worker shall ask all applicants with self-employment income in the household whether taxes were filed for the prior calendar year. If taxes were filed, the tax return must be provided by the applicant. Request the federal 1040 form and Schedule 1. Use a copy prepared by a professional tax accountant, if available.

If applicant has self-employment income ask the following question: • Do you have more than one source of self-employment income?

If applicant has rental income ask the following question: • Is all rental property included on tax forms?

If applicant has farm income ask the following question: • Is all farm income included on tax forms?

If yes to any questions above, request corresponding schedules.

Use the self-employment income reported on the IRS 1040 tax forms for the most recent tax year. If the prior calendar year taxes are not available by the tax filing deadline, document in HE+ System Notes why prior calendar year taxes are not available. Divide the total net annual income from the Schedule 1 by 12 to obtain the average monthly income amount; if in business for less than the full calendar year, divide the total net annual income by the number of months the business was in operation. For example, if the business started July 1 of the previous year, take the net annual income and divide it by six (6). If a business generated income for only a few months of the previous year, but was in existence for the whole year, divide the net annual income by 12 to get the average monthly income. (Seasonal businesses would be an example of this situation.) Income should only be entered for the months of the test period if the business was still in operation during that time.

When the applicant did not file taxes or did not file self-employment on their taxes, instruct them to complete an S-GIRF as found on the Division website. See Section 3.3.5.2. A copy of the S-GIRF and/or tax records shall be retained in the HE+ System as a document upload. Rental income must be verified by tax records for HE+ Program Services. If rental income is not verified by income taxes for the homeowner or dwelling owner, the homeowner, including the rental unit, may not be