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. Because they are not considered self-employed, they are not
entitled to the exclusion of allowable costs of producing self-employment
income. The income from these types of corporations should be treated as
regular earned income, not self-employment income.
Although income received from these corporations is not
considered self-employment, the income as reported on the LLC or S-Corporation
owner's individual form 1040, shall be counted in determining the household's
eligibility and benefit level. Income verified on the 1040 would then be
annualized. In the case of a new business, anticipated income shall be used to
determine financial eligibility until a tax form is available.
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.
4.403.1
Self-Employment
See 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.
4.403.11
Determining Monthly Income
from Self-Employment
The 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.
4.403.12
Averaging
Self-Employment Income
Self-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.
4.403.2
Boarder Income
Persons 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. If the cents in the total are one (1)
through forty-nine (49), the total is rounded down to the lower dollar, if the
cents are fifty (50) through ninety-nine (99), the total is rounded to the next
higher dollar.
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.
4.403.3
School Employee Income
The 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.
Notes
10 CCR 2506-1-4.403
37
CR 15, August 10, 2014, effective 9/1/2014
37
CR 21, November 10,2014, effective 12/1/2014
38
CR 23, December 10, 2015, effective 1/1/2016
39
CR 01, January 10, 2016, effective
2/1/2016
39
CR 05, March 10, 2016, effective
4/1/2016
39
CR 07, April 10, 2016, effective
5/1/2016
39
CR 15, August 10, 2016, effective
9/1/2016
39
CR 17, September 10, 2016, effective
10/1/2016
39
CR 19, October 10, 2016, effective
11/1/2016
39
CR 23, December 10, 2016, effective
1/1/2017
40
CR 11, June 10, 2017, effective
7/1/2017
40
CR 17, September 10, 2017, effective
10/1/2017
41
CR 15, August 10, 2018, effective
9/1/2018
40
CR 23, December 10, 2017, effective
12/30/2018
42
CR 01, January 10, 2019, effective
2/1/2019
42
CR 03, February 10, 2019, effective
3/15/2019
42
CR 17, September 10, 2019, effective
10/1/2019
42
CR 18, October 10, 2019, effective
10/1/2019
42
CR 23, December 10, 2019, effective
12/30/2019
43
CR 01, January 10, 2020, effective
1/30/2020
43
CR 05, March 10, 2020, effective
2/7/2020
43
CR 07, April 10, 2020, effective
4/30/2020
43
CR 21, November 10, 2020, effective
11/30/2020
44
CR 21, November 10, 2021, effective
11/30/2021
45
CR 05, March 10, 2022, effective
3/30/2022
45
CR 19, October 10, 2022, effective
10/1/2022
45
CR 19, October 10, 2022, effective
11/1/2022
45
CR 21, November 10, 2022, effective
11/30/2022
46
CR 17, September 10, 2023, effective
9/30/2023
