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 1025.015.01 Cash Remaining from an Assistance Check or Other Budgeted Monthly Income 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).