The following shall be considered as earned income:
A. Wages and Salaries 1. All payments for services as an employee, including garnishments, or money payments legally obligated to the employee and diverted to a third party for the employee's household expenses. Countable income from employment received by students in institutions of higher education while participating in state work-study programs or a fellowship with a work requirement shall not be considered earned income.2. Earned income includes government payments from Agricultural Stabilization and Conservation Service and wages of AmeriCorps Volunteers in Service to America (VISTA) workers. VISTA payments are excluded if the client was receiving SNAP benefits when they joined VISTA. If the client was not receiving SNAP benefits when they joined VISTA, the VISTA payments shall count as earned income. Temporary interruptions in SNAP participation shall not alter the exclusion once an initial determination has been made (see Section 4.405.2, A, 3). Temporary interruptions shall be defined as a period where a household or individual missed a full month of benefits, excluding instances where the lapse in benefits is due to the local office not taking timely action in accordance with the processing standards outlined in Sections 4.604, 4.205, or 4.209.1.3. Wages held at the request of the employee shall be considered income to the household in the month the wages would otherwise have been paid by the employer. Advances on wages shall count as income in the month received, if reasonably anticipated. However, wages held by the employer as a general practice shall not be counted as income unless the household anticipates that it will receive income from such wages previously withheld by the employer. When an advance on wages is subsequently repaid from current wages, only the wages received is considered as income. The amount of repayment is disregarded, even if the wage-earner was not a SNAP participant at the time of the advance.
4. Payment for sick leave, vacation pay, and bonus pay shall be considered as earned income, if the person was still employed while receiving the pay.B. Training Allowances 1. Payments from vocational and rehabilitation programs recognized by federal, state, or local governments, such as the Job Opportunities and Basic Skills (JOBS) Program, to the extent they are not a reimbursement, except for allowances paid under the Workforce Innovation and Opportunity Act (WIOA).2. Earned income will include earnings to individuals who are participating in the on-the-job training under Section 204(5), Title II, of the Workforce Innovation and Opportunity Act (WIOA). This provision does not apply to household members under nineteen (19) years of age who are under the parental control of another adult member. Earnings include monies paid by the Workforce Innovation and Opportunity Act (WIOA) and monies paid by an employer.C. Title I Monies Payments received under Title I (VISTA-University Year of Action) of the Domestic Volunteer Service Act of 1973 shall be considered earned income and subject to the earned income deduction, excluding payments made to those households specified in Section 4.405.2.
D. Income of Strikers Pre-strike eligibility is determined by considering the day prior to the strike as the day of application and assuming the strike was not occurring. Eligibility at the time of application shall be determined by comparing the striking member's income as of the day before the strike to the striking member's current income and adding the higher of the two to the current income of the non-striking household members during the month of application.
E. Self-Employment The method of ascertaining the self-employment income to be considered for SNAP purposes is often difficult and the guidelines set forth in Sections 4.403.1-4.403.12 are meant to clarify and aid the process.
In determining gross self-employment income, all income received by the self-employment household must be considered. Self-employment income includes:
1. Monies received from rental or lease of self-employment property. Rental property shall be considered a self-employment enterprise. However, the income will be considered as earned income only if the household member (or disqualified person) actively manages the property at least an average of twenty (20) hours per week.2. Monies received from the sale of capital goods, services, and property connected to the self-employment enterprise. Proceeds of sales from capital goods or equipment are to be treated as income rather than as capital gains. The term "capital gains", as used by the Internal Revenue Service (IRS), describes the handling of the profit from the sale of capital assets such as, but not limited to, computers and other electronic devices, office furniture, vehicles, and equipment used in a self-employment enterprise; or securities, real estate, or other real property held as an investment for a set time period. For SNAP purposes, the total amount received from the sale of capital goods shall be counted as income to the household.
F. Owners of Limited Liability Corporations (LLC) and S-Corporations For SNAP purposes, owners of LLCs or S-Corporations are considered employees of the corporation and, therefore, cannot be considered self-employed. The income from these types of corporations should be treated as regular earned income, not self-employment income.
If the owner of the LLC or S-Corporation takes a draw, the total business income minus all expenses will count as earned income for the client. If the owner receives a salary, we count all payments for services as an employee as regular earned income. There are situations where the owner of an LLC or S-Corporation may receive a salary and a draw, so both sources of income must be counted.
Client statement of LLC and S-Corporation income is acceptable, unless questionable. If the income meets the SNAP definition of questionable, verification can be provided in the form of pay stubs, bank records, the LLC or S-Corporation owner's individual form 1040, or any other document that sufficiently establishes countable earned income for the owner.
G. Boarder Income The income of boarders shall include all direct payments to the household for room and meals, including contributions to the household for shelter expenses. Shelter expenses paid directly by boarders to someone outside of the household shall not be counted as income to the household. See Section 4.403.2 regarding calculating income from a boarder.
4.403.1Self-EmploymentSee Section 4.403, E, for a description of what is considered self-employment income.
A. Self-employment is defined as a situation where some or all income is received from a self-operated business or enterprise in which the individual retains control over work or services offered, and assumes the necessary business risks and expenses connected with the operation of the business. Households in which one or more members are engaged in an enterprise for gain either as an independent contractor, franchise holder, or owner-operator must be considered as self-employed, provided that the members are actively engaged in the enterprise on a day-to-day basis. In instances where the members hire or contract for another person or firm to handle the day-to-day activities of such enterprise, the members will have self-employment income but will not be considered as self-employed for purposes of work registration. The self-employed individual need not own one hundred percent (100%) of the company to be considered self-employed.
B. The receipt of income from self-employment, which may constitute all or only a portion of the income of the household, does not automatically exempt the members from the work registration requirement. This determination will be made based on the assessment of the eligibility technician and the household's declaration that the self-employment enterprise requires thirty (30) hours of work per week or averages annually thirty (30) hours per week.4.403.11Determining Monthly Income from Self-EmploymentThe amount of income considered from self-employment in the month of application shall be the gross amount of anticipated income plus capital gains less anticipated costs of doing business.
A. To determine average income from self-employment, the worker first must determine the gross amount of income, actual or anticipated, including capital gains, for the period of time over which the self-employment income is being considered. The allowable costs of producing the self-employment income are excluded and the net income divided by the number of months over which the income is intended to cover. For federal income tax purposes, only fifty percent (50%) of the proceeds from the sale of capital goods is taxed. Therefore, if income tax forms are used to determine household income, the eligibility technician must be aware that the full amount of the capital gains is counted as income.B. Allowable costs of doing business include, but are not limited to: identifiable costs of labor; stock; raw materials; seed; fertilizer; payments on the principal of the purchase price of income producing real estate; capital assets, equipment, machinery and other durable goods; interest paid to purchase income-producing property; insurance premiums; taxes paid on income-producing property; and, other similar items that are necessary costs of doing business.C. The following shall not be allowed as a deduction for business costs: 1. Any amount that exceeds the payment a household receives from a boarder for lodging and meals is not allowable as a cost of doing business.2. Any amount claimed as a net loss sustained in any prior period.3. Federal, state, and local income taxes, money set aside for retirement purposes, and other work-related personal expenses (such as meals). These expenses are accounted for by the earned income deduction. However, any taxes paid by the business for employees (such as the business share of social security taxes) are allowed as a business deduction.D. Anticipating Capital Gains and Other Self-Employment Income When self-employment income is calculated on an anticipated basis, any capital gains that the household anticipates receiving in the next twelve (12) months, beginning with the date the application is filed, are added, and divided by twelve (12). This amount is used in successive certification periods over the next twelve months unless a change occurs. A new average monthly amount must be calculated over this twelve-month period if the anticipated amount of capital gains changes. The anticipated monthly amount of capital gains and the anticipated monthly self-employment income then are added and the anticipated cost of producing the income deducted. The cost is calculated by anticipating the monthly allowable costs of producing the self-employment income.
The monthly net self-employment income will be added to any other earned and unearned income received by the household to determine eligibility of self-employed SNAP applicants.
For those households with self-employment income, which is not annualized, the eligibility technician shall anticipate income. Any anticipated proceeds from the sale of capital gains shall be used as income in the month the proceeds are anticipated to be received.
4.403.12Averaging Self-Employment IncomeSelf-employment income must be averaged over the period for which the income is intended to cover, as outlined below:
A. Self-Employment as Primary Annual Support When a household receives its annual support from self-employment income, such income is to be averaged over twelve (12) months to determine the household's average monthly income from this source. This policy applies even if the income is received in only a short period of time or the household receives income from other sources in addition to the self-employment income.
However, if the averaged, annualized amount does not accurately reflect the household's actual circumstances because the household has experienced a substantial increase or decrease in business, the worker must calculate the self-employment income on anticipated earnings and not on the basis of prior income.
B. Self-Employment as Partial Support Households may receive income from self-employment that represents only a part of their annual income. Such self-employment income must be averaged over the self-employment months rather than over a twelve (12) month period.
C. Self-Employment Income Received Monthly Self-employment income received on a monthly basis and representing a household's annual support normally will be averaged over twelve (12) months. If the monthly average does not accurately reflect the household's actual financial situation because of a substantial increase or decrease in business, the worker must calculate self-employment income based on the household's anticipated earnings.
D. Self-Employment Income from a New Source Income from a self-employment enterprise that has been in business less than a year is to be averaged over the period of time the business has been in operation and the monthly amount projected for the coming year.
E. Self-Employment Income of a Farmer 1. If after deducting all allowable business expenses from gross income received from self-employment as a farmer, the costs of producing the income exceed the income derived, such losses shall be offset against other income received by the household. Steps to take in offsetting the loss shall be as noted below. The net losses shall be prorated over the period intended and the monthly prorated amount deducted from other monthly income.2. For purposes of applying this rule, an individual shall be considered a self-employed farmer if they receive or expect to receive gross annual income of one thousand dollars ($1,000) or more from the farm enterprise. In addition, the following steps shall be taken when determining eligibility and benefits levels of the self-employed farmer. a. The monthly prorated loss shall be deducted first from any other "self-employment" income.b. Any remaining loss will then be deducted from other earned income into the household. This total shall be the figure from which the earned income deduction shall be calculated.c. Finally, any other income shall be added, and this total shall be the amount used to compare the household's gross income to income eligibility standards for the appropriate-sized household.4.403.2Boarder IncomePersons paying a reasonable amount for room and board shall be excluded from the household when determining the household's eligibility and benefit level. The income of households owning and operating a commercial boarding house shall be handled as described in Section 4.403.11. For all other households, payments from the boarder shall be treated as self-employment income and the household's eligibility determined as follows:
A. The income from boarders shall include all direct payments to the household for room and meals, including contributions to the household for shelter expenses. Shelter expenses paid directly by boarders to someone outside of the household shall not be counted as income to the household.B. After determining the income received from the boarders, the local office shall exclude that portion of the boarder payment which is the cost of doing business. The cost of doing business shall be equal to either of the following costs, provided that the amount allowed as a cost of doing business shall not exceed the payment the household received from the boarder for lodging and meals. 1. The value of the maximum allotment for the household size that is equal to the number of boarders;2. The actual documented cost of providing room and meals if the actual cost exceeds the appropriate maximum allotment. If actual costs are used, only separate and identifiable costs of providing room and meals to boarders shall be allowed as a cost of doing business; or,3. If the boarder income received is from foster care payments, the entire amount of the payment will be disregarded as a cost of doing business.C. The monthly net income (after subtracting costs of doing business) from self-employment shall be added to other monthly earned income and the twenty percent (20%) earned income deduction shall be applied to the total dollar amount.D. Shelter costs the household actually incurs, even if the boarder contributes to the household for part of the household's shelter expenses, shall be computed to determine if the household will receive a shelter deduction. However, the shelter costs shall not include any shelter expenses paid directly by the boarder to a third party, such as to the landlord or the utility company.4.403.3School Employee IncomeThe provisions of this section are intended to apply primarily to teachers and other school employees.
A. Households with members who receive income other than that which is paid on an hourly piece-work basis from employment under a contract which is renewable on an annual basis will have such income averaged over a twelve (12) month period to determine household eligibility.B. Such members will be considered to be receiving compensation for an entire year, even though predetermined non-work periods are involved or actual compensation is scheduled for payment during work periods only. The renewal process may involve a signing of a new contract each year, be automatically renewable, or, as in cases of school tenure, rehire rights may be implied and thus preclude the use of a written contract altogether. The fact that such a contract is in effect for an entire year does not necessarily mean that the contract will stipulate work every month of the year. Rather, there may be certain predictable non-work periods or vacations, such as the summer break between school years.C. Income from such a contract will be considered as compensation for a full year, regardless of the frequency of compensation as stipulated in the terms of the contract, as determined at the convenience of the employer, or as determined at the wish of the employee.D. The annual income household members receive from contractual employment described above shall be averaged over a twelve (12) month period to determine the member's average monthly income. To determine household eligibility all other monthly income from other household members will be added to this average monthly income.37 CR 15, August 10, 2014, effective 9/1/201437 CR 21, November 10,2014, effective 12/1/201438 CR 23, December 10, 2015, effective 1/1/201639 CR 01, January 10, 2016, effective 2/1/201639 CR 05, March 10, 2016, effective 4/1/201639 CR 07, April 10, 2016, effective 5/1/201639 CR 15, August 10, 2016, effective 9/1/201639 CR 17, September 10, 2016, effective 10/1/201639 CR 19, October 10, 2016, effective 11/1/201639 CR 23, December 10, 2016, effective 1/1/201740 CR 11, June 10, 2017, effective 7/1/201740 CR 17, September 10, 2017, effective 10/1/201741 CR 15, August 10, 2018, effective 9/1/201840 CR 23, December 10, 2017, effective 12/30/201842 CR 01, January 10, 2019, effective 2/1/201942 CR 03, February 10, 2019, effective 3/15/201942 CR 17, September 10, 2019, effective 10/1/201942 CR 18, October 10, 2019, effective 10/1/201942 CR 23, December 10, 2019, effective 12/30/201943 CR 01, January 10, 2020, effective 1/30/202043 CR 05, March 10, 2020, effective 2/7/202043 CR 07, April 10, 2020, effective 4/30/202043 CR 21, November 10, 2020, effective 11/30/202044 CR 21, November 10, 2021, effective 11/30/202145 CR 05, March 10, 2022, effective 3/30/202245 CR 19, October 10, 2022, effective 10/1/202245 CR 19, October 10, 2022, effective 11/1/202245 CR 21, November 10, 2022, effective 11/30/202246 CR 17, September 10, 2023, effective 9/30/202347 CR 15, August 10, 2024, effective 8/30/2024