Current through Register Vol. 49, No. 13, September 23, 2024
Subpart
1.
County agency duty to determine earned income.
The county agency must determine the total amount of earned
income available to the filing unit. Earned income from self-employment must be
calculated according to subpart
2. Earned income from
contractual agreements must be calculated according to subpart
3. The total amount of earned
income available to an individual for a month must be determined by combining
the amounts of earned income calculated under subparts
2 to
4. The total amount of earned
income available to an assistance unit for a month must be determined by
combining the total earned income of each filing unit member.
Subp. 2.
Earned income from
self-employment.
The county agency must determine the amount of earned income
from self-employment by subtracting business costs from gross receipts
according to items A to D.
A.
Self-employment expenses must be subtracted from gross receipts except for the
expenses listed in subitems (1) to (14):
(1)
purchases of capital assets;
(2)
payments on the principal of loans for capital assets;
(3) depreciation;
(4) amortization;
(5) the wholesale costs of items purchased,
processed, or manufactured that are unsold inventory with a deduction for the
costs of those items allowed at the time they are sold;
(6) transportation costs that exceed the
amount allowed for use of a personal car in the United States Internal Revenue
Code;
(7) the cost of
transportation between the individual's home and place of employment;
(8) salaries and other employment deductions
made for members of an individual's assistance unit or for individuals who live
in the individual's household for whom the individual is legally
responsible;
(9) monthly expenses
in excess of $71 for a roomer;
(10)
monthly expenses in excess of $86 for a boarder;
(11) monthly expenses in excess of $157 for a
roomer-boarder;
(12) annual
expenses in excess of $103 or two percent of the estimated market value on a
county tax assessment form, whichever is greater, as a deduction for upkeep and
repair against rental income;
(13)
expenses not allowed by the United States Internal Revenue Code for
self-employment income; and
(14)
expenses which exceed 60 percent of gross receipts for child care performed in
an individual's home unless the individual can document a higher amount. When
funds are received from the quality child care program, those funds are
excluded from gross receipts, and the expenses covered by those funds must not
be claimed as a business expense that offsets gross receipts.
B. Except for farm income under
item C, the self-employment budget period begins in the month of application
for applicants and in the first month of self-employment for recipients. Gross
receipts from self-employment must be budgeted in the month in which they are
received. Expenses must be budgeted against gross receipts in the month in
which those expenses are paid except for subitems (1) to (3):
(1) The purchase cost of inventory items,
including materials that are processed or manufactured, must be deducted as an
expense at the time payment is received for the sale of those inventory items,
processed materials, or manufactured items, regardless of when those costs are
incurred or paid.
(2) Expenses to
cover employee FICA, employee tax withholding, sales tax withholding, employee
worker's compensation, employee unemployment compensation, business insurance,
property rental, property taxes, and other costs that are commonly paid at
least annually, but less often than monthly, must be prorated forward as
deductions from gross receipts over the period they are intended to cover,
beginning with the month in which the payment for these items is
made.
(3) Gross receipts from
self-employment may be prorated forward to equal the period over which the
expenses were incurred except that gross receipts must not be prorated over a
period that exceeds 12 months. This provision applies only when gross receipts
are not received monthly but expenses are incurred on an ongoing monthly
basis.
C. Farm income
must be annualized. Farm income is gross receipts minus operating expenses,
subject to item A. Gross receipts include sales, rents, subsidies, soil
conservation payments, production derived from livestock, and income from sale
of home-produced foods.
D. Income
from rental property must be considered self-employment earnings when the owner
spends an average of 20 hours per week on maintenance or management of the
property. A county agency must deduct an amount for upkeep and repairs,
according to item A, subitem (11), for real estate taxes, insurance, utilities,
and interest on principal payments. When an applicant or recipient lives on the
rental property, the county agency must divide the expenses for upkeep, taxes,
insurance, utilities, and interest by the number of rooms to determine the
expense per room. The county agency shall deduct expenses from rental income
only for the number of rooms rented, not for rooms occupied by an assistance
unit. When an owner does not spend an average of 20 hours per week on
maintenance or management of the property, income from rental property must be
considered unearned income. The deductions described in this item must be
subtracted from gross rental receipts.
Subp. 3.
Earned income from contractual
agreements.
The county agency must prorate the amount of earned income
received by individuals employed on a contractual basis over the period covered
by the contract even if the payments are received over a shorter period.
Subp. 4.
Other earned
income.
The county agency must consider all other forms of earned
income not specifically provided for under subparts
2 and
3 to be earned income
available to the individual in the month it is received.
