Current through September 24, 2024
(1) Determining
Income From Self-Employment.
(a) Annual
Income. Income which is received annually, and/or which is an integral part of
annual income will be totaled and prorated over 12 months, even if the income
is received only once or over a period of time shorter than twelve months. Such
income is usually derived from farming but may also apply to other
self-employment enterprises. Annual income will be prorated over 12 months even
if a person has income from sources other than self-employment. Income received
once annually will be prorated over 12 months beginning with the month the
income is received. Income which represents annual income but which is received
periodically during a year will be totaled and averaged over 12 months. This
average figure will be used to project future income (if all other factors
remain relatively constant). If a self-employed person is under contract, the
12-month period begins the first month the person receives payment under the
contract.
(b) Income from Migrant
Labor, Seasonal Work. An estimated average monthly income from migrant labor,
seasonal farm work and other seasonal employment will be considered during the
months it is received.
(c) Monthly
Self-Employment Income. When self-employment income is received monthly, the
average monthly income will be estimated based on past income and substantial
changes in circumstances which have occurred, such as an increase or decrease
in business.
(d) Self-Employment as
Part of Total Income. Self-employment income which is obtained only for a
specific period of time will be averaged over the months it is
received.
(e) Income From a New
Business. When a self-employment enterprise has been in operation less than a
year, the Families First grant will be based on current income and a change
will be made at the time the AG reports income on which a more reasonable
projection can be made, or when a pattern of average income is
discovered.
(2) Special
Income Consideration.
(a) Rental Property.
1. Income derived from rental property is
considered as earned income if the individual is actively engaged in producing
such income. "Actively engaged" means the individual has some responsibility in
earning the income. This responsibility may include managerial activities.
However, if the individual has no specific responsibility in earning the
income, such as where rental properties are in the hands of rental agencies and
the check is forwarded to the individual or where an individual rents farm land
to others and receives a money payment, the income would not be classified as
earned income. The cost of doing business is an allowable deduction regardless
of whether the income is earned or unearned.
(b) Capital Gains. The proceeds from the sale
of capital goods or equipment are calculated in the same manner as a capital
gain for Federal income tax purposes. Even if only 50% of the proceeds from the
sale of capital goods or equipment is taxed for Federal income tax purposes,
the worker shall count the full amount of the capital gain as income.
(3) Costs Of Producing Income From
Self-Employment.
(a) When a member of the AG
is self-employed, he/she shall be required to keep a record of expenses
incurred in the production of this income.
(b) Expenses.
1. Allowable costs of producing income from
self-employment include, but are not limited to:
(i) Identifiable costs of labor (salaries,
employers share of Social Security, insurance, etc.);
(ii) Stock, raw materials, seed and
fertilizer, feed for livestock;
(iii) Rent and cost of building
maintenance;
(iv) Business
telephone costs;
(v) Costs of
operating a motor vehicle when required in connection with the operation of the
business;
(vi) Interest paid to
purchase income producing property;
(vii) Insurance premiums and taxes paid on
income producing property;
(viii)
Costs of feed for work stock; and
(ix) Costs of meals and equipment for
children for whom day care is provided in the self-employed person's
home
2. Unallowable
Deductions. The following are not considered as costs of producing
self-employment income and shall not be deducted from the AG's self-employment
income;
(i) Payments on the principal of the
purchase price of income producing real estate and capital assets, equipment,
machinery and other durable goods;
(ii) Net losses from previous
periods;
(iii) Federal, state, and
local income taxes, money set aside for retirement purposes, and other
work-related personal expenses (such as transportation to and from work).
(These expenses are accounted for in the flat work expense
deduction/disregard.);
(iv) Costs
of producing home produce intended for family consumption;
(v) Family living expenses;
(4) Determining Monthly
Income When Averaged. For the period of time over which self-employment is
determined, add all gross self-employment income (including capital gains),
exclude the costs of producing the self-employment income, and divide the
self-employment income by the number of months over which the income will be
averaged.
(5) Determining Monthly
Income When Anticipated. For those AGs whose self-employment income is not
averaged, but instead is calculated on an anticipated basis, add any capital
gains the AG anticipates it will receive in the next 12 months (starting with
the date the application is filed) and divide this amount by 12. Use this
amount in successive months unless the anticipated amount of capital gains
changes. Add the anticipated monthly amount of capital gains to the anticipated
monthly self-employment income and subtract the cost of producing the income.
Except for depreciation, calculate the cost of producing the self-employment
income by anticipating the monthly allowable costs of producing the
self-employment income.
(6)
Assistance Groups With Boarders.
(a) AGs that
take in boarders or that operate commercial boarding houses are considered
self-employed. Identifiable expenses are allowed as a cost of doing business as
in any self-employment enterprise.
Authority: T.C.A. §§
4-5-201 et seq., 71-1-105, Public
Acts of 1996, Chapter 950, and
45 C.F.R.
233.20.