0805.000.00 Eligibility

0805.015.15 Overhead Expense of Producing Income

IM-129 August 20, 2020

Deduct the following “overhead expenses” for income producing property or self-employment enterprises, when applicable, to arrive at the gross earned or non-earned income:

  • Verifiable cost of ownership:
    1. mortgage or contract payments
      • interest payments made on a loan for business purposes. (Payments made on a loan principal will not be considered a business expense.)
    2. taxes
    3. insurance
  • Any verifiable expenses relating to the cost of renting property.EXAMPLE: Ms. Jones became disabled and moved in with her daughter.  She receives $200.00 a month OASDI, and rents her home for $60.00 a month.  Since Ms. Jones’ son-in-law actually manages the property, this income is considered non-earned income.  She does pay taxes of $240.00 a year and insurance of $96.00 on the property she rents.  Her expense of producing this income is $28.00 ($240.00 + $96.00 = $336.00 divided by 12 = $28.00).  Her gross unearned income entered on Line 4 of the IM-30A is $232.00 [$200.00 + $32.00 ($60.00 – $28.00)].
  • Any verifiable expenses relating to the cost of producing income from farm property:  cost of feed, seed, fertilizers, tools, equipment repair and replacement, labor, cost of operation of farm machinery, shipping costs, custom work, and land rental.
    NOTE: To determine the gross cash income received from farming, refer to the procedures outlined in Section 1025.015.01 of the December 1973 Eligibility Requirements manual.
  • Any verifiable expenses relating to the cost of producing business income:  cost of tools; equipment repair and replacement; labor; operating equipment; purchase of materials, supplies, or stock of goods; rental or ownership costs and utilities on separate business establishment; subcontracting (as paid).