Use this guide to determine and calculate SNAP self-employment income for sole proprietorships.

Sole proprietorships are businesses owned and operated by one individual who is fully responsible for all losses and receives all profits.

Step 1: Self-Employment Details

Ask the client:

• What type of work is being done, how long this has been happening and what type of business is declared?
  • We want to understand the work, the length of time, and how they declare the business in order to ask for the correct verification and income
• Are taxes filed and what are they? Individual taxes, business taxes, or both?
  • If both types are filed, both tax returns should be requested
• Is your most recent tax return representative of your current income?
• Are there business expenses associated with this self-employment income?

Step 2: Verification

A Sole Proprietorship typically does not file a separate business tax return

• 1040 – Individual Income Tax Return
• Schedule C (Form 1040) – Profit or Loss from Business (Sole Proprietorship)

Step 3: Calculate the Income

• Review full tax document, locate Schedule C
  • If client operates multiple businesses, each will have its own Schedule C
• Use Schedule C, line 3 as the gross self-employment income
• Divide by 12 months
  • Or actual number of months in business, if less than one year
• Deduct 50%, only if business expenses are declared
• Enter total in FACS Income tab, in Monthly Self-Employment Income block (C39/F64)
  • For SNAP, do not enter an amount in the Monthly Business Expense block (C40/F66)
• Document the entire income calculation in case notes

Taxes not available or not representative

If the client declares they do not file taxes or the business is new and taxes have not yet been filed:

• Self-employment income must be verified using records from the past 12 months
• If self-employed for less than one year, records must cover the entire period of self-employment

If prior taxes are no longer representative due to significant increase or decrease in income:

• Self-employment income should be calculated using only the income that can reasonably be anticipated to project future earnings

Acceptable verification of monthly gross income may include:

• Accounting or sales software documents, app or website earnings records, or a written log provided by the client

Resources

• 340:50-7-30 Self-employed households
• Income Calculations: Self Employment Overview