PERMANENT RULES
SOCIAL AND HEALTH SERVICES
(Economic Services Administration)
Date of Adoption: June 6, 2003.
Purpose: Adopting amended WAC 388-450-0080 What is self-employment income? and 388-450-0085 How we count your self-employment income?, to clarify what activities qualify as self-employment, what deductions the department allows for self-employed individuals, and rewrite the text of the rule to be more easily understood.
Citation of Existing Rules Affected by this Order: Amending WAC 388-450-0080 and 388-450-0085.
Statutory Authority for Adoption: RCW 74.04.050, 74.04.055, 74.04.057, and 74.04.510.
Adopted under notice filed as WSR 03-09-073 on April 15, 2003.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 2, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making:
New 0,
Amended 0,
Repealed 0;
Pilot Rule Making:
New 0,
Amended 0,
Repealed 0;
or Other Alternative Rule Making:
New 0,
Amended 2,
Repealed 0.
Effective Date of Rule:
August 1, 2003.
June 6, 2003
Brian H. Lindgren, Manager
Rules and Policies Assistance Unit
3226.2 (1) Self-employment income is income you earn from
operating a business ((you own or operate rather than income
from an employer. It does not have to be a licensed business
to qualify as self-employment. Some examples of
self-employment include:
(a) Childcare;
(b) Operating an adult family home;
(c) Farming/fishing;
(d) Driving a taxi cab;
(e) Selling self-produced or supplied items;
(f) Working as a subcontractor; and
(g) Operating a lodging for roomers and/or boarders. Roomer income includes money paid to you for shelter costs by someone who lives with you if you:
(i) Own your residence; or
(ii) Rent your residence and charge the other people more than the total rent)), performing a service, selling items you make, or re-selling items to make a profit.
(2) ((Most self-employment income is considered earned
income as described in WAC 388-450-0030.
(3))) You are self-employed if you earn income without having an employer/employee relationship with the person who pays you. Your self-employment does not have to be a licensed business for your business or activity to qualify as self-employment. Some examples of self-employment include:
(a) Childcare;
(b) Driving a taxi cab;
(c) Farming/fishing;
(d) Odd jobs such as mowing lawns, house painting, gutter cleaning, or car maintenance;
(e) Operating a lodging for roomers and/or boarders. Roomer income includes money paid to you for shelter costs by someone who lives with you if you:
(i) Own your residence; or
(ii) Rent all or a part of your residence and the total rent you charge all others in your home is more than your total rent.
(f) Operating an adult family home;
(g) Providing services such as a massage therapist or a professional escort;
(h) Retainer fees to reserve a bed for a foster child;
(i) Selling self-produced or supplied items;
(j) Selling or donating your own biological products such as blood, plasma, eggs, sperm, or hair; and
(k) Working as a subcontractor.
(3) If you are an employee of a company or individual who performs the activities listed in subsection (2) above as a part of your job, we do not count the activity as self-employment. If the person or company who pays you must report your income using IRS form W-2, you are an employee.
(4) Most self-employment income is considered earned income as described in WAC 388-450-0030.
(5) For TANF/SFA and Basic Food ((assistance)) there are
special rules about renting or leasing out property or real
estate that you own.
(a) We count the income you get as unearned income unless you spend at least twenty hours per week managing the property.
(b) For TANF/SFA, we count the income as unearned income unless the use of the property is a part of your approved individual responsibility plan.
[Statutory Authority: RCW 74.08.090 and 74.04.510. 01-19-020, § 388-450-0080, filed 9/11/01, effective 10/1/01; 99-16-024, § 388-450-0080, filed 7/26/99, effective 9/1/99. Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090. 98-16-044, § 388-450-0080, filed 7/31/98, effective 9/1/98.]
(1) We decide how much of your self-employment income to count by:
(a) Adding together your gross self-employment income and
((your capital gains (all of the income you receive from the
sale of)) any profit you make from selling your business
property or equipment(()));
(b) Subtracting your business expenses as described in subsection (2) below; and
(c) Dividing the remaining amount of self-employment income by the number of months over which the income will be averaged.
(2) We automatically subtract one hundred dollars as a business expense even if your costs are less than this. If you want to claim more than one hundred dollars, you must itemize and provide proof of your expenses in order for us to count them. We never allow the following expenses:
(a) Federal, state, and local income taxes;
(b) Money set aside for retirement purposes;
(c) Personal work-related expenses (such as travel to and from work);
(d) Net losses from previous periods;
(e) Depreciation; or
(f) Any amount that exceeds the payment you get from a boarder for lodging and meals.
(3) If you have worked at your business for less than a year, we figure your gross self-employment income by averaging:
(a) The income over the period of time the business has been in operation; and
(b) The monthly amount estimated for the coming year.
[Statutory Authority: RCW 74.08.090 and 74.04.510. 01-19-020, § 388-450-0085, filed 9/11/01, effective 10/1/01; 99-16-024, § 388-450-0085, filed 7/26/99, effective 9/1/99. Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090. 98-16-044, § 388-450-0085, filed 7/31/98, effective 9/1/98.]