Department of Human Services

Food Stamp Online  Policy Manual

Treatment of Income – Budgeting

Revised: 

26.4

DETERMINING SELF-EMPLOYMENT INCOME

Food Stamp Table of Contents

1240-1-4-.24(1)(a)

Situations for Averaging Income

 

1.      When Income Is for a Year

 

Annualize self-employment income which represents an annual support over a 12-month period, even if the income is received in only a short period of time or if the household receives income from other sources in addition to self-employment. If self-employment income is received once annually, average the income over a 12-month period beginning with the month the income is received. If a person is under contract, begin the 12-month period with the first month the person receives payment under the contract. If the prorated amount does not accurately reflect the household’s actual circumstances because of substantial increases or decreases in business, calculate the self-employment income based on anticipated changes.

 

2.      When Self-Employment Income Is Received Monthly

 

Self-employment income which is received on a monthly basis, but which represents a household’s annual support, normally will be averaged over a 12-month period. If the averaged amount does not accurately reflect the household’s actual circumstances because the household has experienced a substantial increase or decrease in business, calculate the self-employment income based on anticipated earnings.

 

3.      When Self-Employment Income Is Only Part of Total Income

 

When self-employment income is intended to meet the household’s needs for only part of the year, average the income over the period of time it is intended to cover.

 

4.      Income From New Business

 

If a household’s self-employment enterprise has been in existence for less than a year, average the income from the self-employment enterprise over the period of time the business has been in operation and project the monthly amount for the coming year. If the business has been in operation for such a short time that there is insufficient information to make a reasonable projection, the household may be certified for food stamps for less than a year, until the business has been in operation long enough to establish a pattern of average income.

 

Glossary of Terms

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Food Stamp Table of Contents

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