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Self-Employment Income (Farming) - SNAP (Food Stamps)

In the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamp Program), money earned from self-employment as a farmer is counted as earned income.

Farmers are eligible for an unearned income deduction for any costs that exceed the income derived from self-employment as a farmer.

In order to determine profit or loss, the amount of net income from the farming enterprise must be determined.

The amount is calculated by first adding the gross receipts from a self-employment farming enterprise and the total gain from the sale of any capital goods or equipment related to the business to find gross profits. The costs of doing business are then subtracted from the result.

If a self-employment farming business has been in operation for at least 12 months, use the gross receipts and costs of doing business for the past 12 months. Then divide this amount by 12.

If a business has been in operation less than 12 months, compute the average for the number of months the operation has been in business to determine a monthly average.

In States other than Kansas and Maryland, the costs of doing business include the following:

·        labor;

·        stock;

·        raw material;

·        advertising;

·        seed and fertilizer;

·        interest paid to purchase income-producing property;

·        maintenance and repairs that are not capital expenditures;

·        tools and supplies that are not capital expenditures;

·        costs of goods sold;

·        accounting and legal fees;

·        professional expenses;

·        costs of maintaining a place of business (rent and utilities)

·        insurance premiums; and

·        taxes paid on income-producing property.

The following are not considered as costs of doing business:

·        payments on the principal of the purchase price of income-producing real estate and capital assets, equipment, machinery, and other durable goods;

·        net losses from previous periods;

·        Federal, State, and local income taxes;

·        money set aside for retirement purposes;

·        other work-related personal expenses such as transportation to and from work (the Earned Income Deduction accounts for these expenses); and

·        depreciation.

If your household resides in Kansas, read the topic "Self-Employment Income Determination (Kansas) - SNAP (Food Stamps) " for the alternative method of calculating self-employment income in your State.

If your household resides in Maryland, read the topic "Self-Employment Income Determination (Maryland) - SNAP (Food Stamps) " for the alternative method of calculating self-employment income in your State.

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