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SELF-EMPLOYMENT INCOME

ISSUE DATE: 02/2016

Self-employed people are those who are responsible for their own work schedule and do not have coverage under an employer's liability insurance or workers' compensation.

Self-employed people generally work for themselves rather than an employer. However, people employed in some types of services may be self-employed even if they have an employer or work out of another's business location (for example: real estate sales people, people who work for commission sales, manufacturer's representatives, independent contractors). Self-employed people may or may not have FICA deducted from the check an employer or another party issues to them. When self-employed people indicate they are independent contractors, check with the business the self-employed client is contracting with to see if it considers the client to be self-employed or an employee. If the business states that it considers the self-employed person to be an independent contractor, then the client is self-employed.

People who provide day care in their own homes are self-employed. People who provide day care in someone else's home are not self-employed.

Self-employed people may own a business solely or in partnership.

Income from a sole proprietorship is self-employment income.

When the business is a partnership or S-Corporation, all wages, draws, guaranteed payments, or compensation of officers paid to the business owner or a household member is considered earned income. Any other income from a partnership or S-Corporation is self-employment income.

S-Corporations are considered self-employment businesses. Income received by the shareholders is countable income regardless of whether the individual decides to reinvest his or her income back into the corporation. See 0002.59 (Glossary: RSDI...) for the definition of S-Corporation.

C-Corporations are NOT self-employment businesses. See 0002.09 (Glossary: Calendar Month...) for the definition of C-Corporation.

For treatment of income from specific types of self-employment businesses, see:

0017.15.33.24

Self-Employment Income From Farming.

0017.15.33.27

Self-Employment Income From Roomer/Boarder.

0017.15.33.30

Self-Employment Income From Rental Property.

0017.15.54

Capital Gains as Income.


Add gross self-employment income to other earned income to determine total gross earned income for the client. For programs with a gross income limit, count gross self-employment income toward the gross income limit. Apply the disregards and deductions to total earned income (from self-employment and other earned income) to determine net income. See 0018.06 (Work Expense Deductions), 0018.09 (Dependent Care Deduction), 0018.18 (Earned Income Disregards).

Also see 0017.15.33.03 (Self-Employment, Convert Inc. to Monthly Amt).


MFIP, DWP, GA:

Follow general provisions.


SNAP:

Follow general provisions.

For information about farm loss offset, see the SNAP Farm Loss Offset Policy Guide (PDF).

For information about rental income, see 0017.15.33.30 (Self-Employment Income From Rental Property).


MSA:

For SSI recipients, no county action is required. SSA will make all income determinations and adjustments.

For non-SSI recipients due to excess income, follow general provisions.


GRH:

Follow general provisions for aged, blind, or disabled clients. Follow GA for all other adults.

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