D Verifying Self-Employment Income

Program	Manual Section
All programs	MA606CCC

Procedures

Self-employment income data is not available through an electronic source and the customer may need to provide additional proof. Important! Questionable or conflicting information that could affect eligibility must always be resolved, regardless of the instructions below.

1) Using Reasonable Compatibility for Self-Employment Income

Use the process below to see if you need to request proof of the self-employment income and expenses.

Step	Action
1	Is this a renewal application or reported change to the self-employment income? If YES, STOP. Send a RFI for proof of self-employment income and expenses. If NO, continue to step 2.
2	Did the customer provide the gross amount of self-employment income received? If YES, continue to step 3. If NO, STOP. Send a RFI for proof of self-employment income and expenses.
3	Does the reported amount conflict with any other information that could affect eligibility? If YES, STOP. Send a RFI for proof of self-employment income and expenses. If NO, continue to step 4.
4	When using the gross self-employment income before allowing any expenses, is the customer income eligible? If YES, use the reported self-employment income. The customer’s statement is considered reasonably compatible. No further proof is needed. If NO, send a RFI for proof of self-employment income and expenses.

2) Verifying Counted Self-Employment Income

Use the process below to determine the counted self-employment income when the income is not reasonably compatible.

Step	Action
1	Is the income expected to be the same for the current year as it was for the previous year? If YES, collect the tax forms or business records and continue to step 2. If NO, skip to step 7.
2	Do you have Schedule C-EZ? If YES, continue to step 3. If NO, skip to step 4.
3	Are there business expenses listed on line 2? If YES, a list describing each business expense is needed. Enter the income and expenses in HEAplus. HEAplus will calculate the total self-employment income. If NO, enter the net profit from line 3 as the annual self-employment income.
4	Do you have a schedule C? If YES, STOP enter the gross income in HEAplus and enter the expenses that are listed in section II into HEAplus. HEAplus will calculate the total self-employment income. If NO, continue to step 5.
5	Do you have a schedule F? If YES, STOP enter the gross income (part one #9) in HEAplus and enter the expenses that are listed in section II of schedule F into HEAplus. HEAplus will calculate the total self-employment income. If NO, continue to step 6.
6	Do you have schedule E? If YES, STOP enter the gross income (line 3 and 4) in HEAplus and enter the expenses that are listed on lines 5-19 (line 20 is the total) into HEAplus. HEAplus will calculate the total self-employment income. If NO, continue to step 7.
7	When the tax forms cannot be used, obtain at least the last 30-days of business income and expenses.
8	Review the expenses. Determine which expenses can be deducted from the gross business income using MA606CCC.
9	Subtract the allowable expenses from the gross business income.
10	If the income and expenses are for less than a year. Multiply the amount to get an estimated annual income.
11	Enter the annual amounts into HEAplus. HEAplus will divide the amount by 12 to get the monthly amount.