Temporary Assistance/Case Management Manual

0210.015.20.10 Income From Self-Employment

IM-01 January 3, 2005

Determine self-employment income using one of the methods outlined below.

  1. For income received monthly, project an average and budget that average monthly. For example, a hairdresser earns money each month. Project an average of the hairdresser’s income and budget that average monthly.
  2. Add and prorate income received only once per year or sporadically throughout the year to determine a monthly amount (e.g. a farmer who raises and sells various crops, produce, and livestock at different times during the year).
    1. If the participant is self-employed for one year or more, divide annual income by 12 to determine a monthly amount.
    2. If the participant has been self-employed for less than one year, average the amount of self-employment income over the period of time the business has been in operation to determine a monthly amount.
    3. If the monthly amount determined does not reflect the individual’s actual monthly income because of a substantial increase or decrease in business, use a representative period of earnings to determine monthly earnings.
    4. Average income from self-employment using the best information available. This may include, but is not limited to:
      1. appropriate IRS forms and supporting documentation
      2. written statements from a CPA with knowledge of the business
      3. written statements from an attorney who handles the affairs of the business
      4. other documents that substantiate the income, such as records, receipts, etc.
  3. Determine self-employment earned income by comparison of the gross receipts to the business expenses that are directly related to producing the goods or services and without which the goods or services could not be produced. Refer to 0210.015.25 Overhead Expense of Producing Income