Current through Register Vol. 35, No. 18, September 24, 2024
A. Reporting of earnings as business or
self-employment income to state or federal tax authorities is the usual
indicator of business or self-employment income. Criteria for verification of
business and self-employment income are set forth in Paragraph (2) of
Subsection B of
8.100.130.14 NMAC.
(1) Tax returns from the previous year may be
used, unless the amount of business and self-employment income reported on tax
returns is no longer a good indicator of anticipated income.
(2) If the self-employment enterprise has
been in operation for such a short time that there is insufficient information
to make a reasonable projection, the benefit group shall be required to report
income at shorter intervals until there is enough information to make a longer
projection of anticipated income.
(3) When tax forms are used to annualize and
project income, the expenses reported on the tax forms shall be used, allowing
for adjustments for those expenses or costs that are treated differently or not
allowed under cash assistance policy.
(4) Capital gains are counted in full as
income to determine self-employment income. A capital gain is defined as
proceeds from the sale of capital goods or equipment.
B.
Averaging business or
self-employment income: Business or self-employment income is averaged
over the period the income is intended to cover, even if the benefit group
receives income from other sources.
(1) An
individual in a benefit group, who by contract or self-employment derives his
or her annual income in a period of time shorter than one year, must have
income averaged over a twelve-month period.
(2) If significant changes have occurred
because of a substantial increase or decrease in business and averaged income
will not accurately reflect the self-employed individuals' income, the
self-employment income shall be calculated on the basis of anticipated, not
prior, earnings.
(3) If a
self-employment enterprise has been in existence for less than one year, the
income from self-employment shall be averaged over the period of time the
business has been in operation. The resulting monthly amount shall be projected
for the coming year.
(4)
Seasonal income: Self-employment income that is intended to meet
the benefit group's needs for only part of the year shall be averaged over the
period of time the income is intended to cover.
C.
Determining monthly business or
self-employment income: For the period of time over which
self-employment income is averaged, the individual's monthly self-employment
income is determined by adding all self-employment income, including capital
gains, and excluding allowable costs of producing the self-employment income,
and dividing the resulting self-employment income by the number of months the
income is intended to cover.
