WSR 06-15-049



(Economic Services Administration)

[ Filed July 12, 2006, 8:54 a.m. , effective September 1, 2006 ]

Effective Date of Rule: September 1, 2006.

Purpose: To amend WAC 388-450-0080 What is self-employment income?, to more clearly describe the criteria by which an individual's earned income is considered self-employment income for assistance programs. The amended text better describes when a person has an employer/employee relationship versus when that person is self-employed. The updated criteria clarifications are consistent with federal Internal Revenue Service and Social Security Administration descriptions, as well as state labor and industries statutes and division of child care and early learning statutes and policy.

Citation of Existing Rules Affected by this Order: Amending WAC 388-450-0080.

Statutory Authority for Adoption: RCW 74.04.050, 74.04.055, 74.04.057, 74.04.510, 74.08.090.

Adopted under notice filed as WSR 06-11-101 on May 17, 2006.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 1, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.

Date Adopted: July 7, 2006.

Andy Fernando, Manager

Rules and Policies Assistance Unit

AMENDATORY SECTION(Amending WSR 03-13-045, filed 6/11/03, effective 8/1/03)

WAC 388-450-0080   What is self-employment income?   This section applies to ((TANF/SFA, GA, RCA)) cash assistance, Basic Food, and medical programs for children, pregnant women and families.

(1) Self-employment income is income you earn from ((operating)) running a business, performing a service, selling items you make, or re-selling items to make a profit.

(2) You are self-employed if you earn income without having an employer/employee relationship with the person who pays you. This includes, but is not limited to, when:

(a) You have primary control of the way you do your work; or

(b) You report your income using IRS Schedule C, Schedule C-EZ, Schedule K-1, or Schedule SE.

(3) You usually have an employer/employee relationship when:

(a) The person you provide services for has primary control of how you do your work; or

(b) You get an IRS form W-2 to report your income.

(4) 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) Child care that requires a license under chapter 74.15 RCW;

(b) Driving a taxi cab;

(c) Farming/fishing;

(d) Odd jobs such as mowing lawns, house painting, gutter cleaning, or car ((maintenance)) care;

(e) ((Operating)) Running a lodging for roomers and/or boarders. Roomer income includes money paid to you for shelter costs by someone not in your assistance unit who lives with you ((if you)) when:

(i) ((Own)) You own or are buying your residence; or

(ii) You 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)) Running 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)) items you make or items that are supplied to you;

(j) Selling or donating your own biological products such as ((blood, plasma, eggs, sperm, or hair; and)) providing blood or reproductive material for profit;

(k) Working as ((a subcontractor)) an independent contractor; and

(l) Running a business or trade either on your own or in a partnership.

(((3))) (5) If you are an employee of a company or ((individual)) person who ((performs)) does the activities listed in subsection (2) above as a part of your job, we do not count the ((activity)) work you do 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)) (6) Self-employment income is ((considered)) counted as earned income as described in WAC 388-450-0030 except as described in subsection (7).

(((5))) (7) For ((TANF/SFA)) cash assistance and Basic Food 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 74.04.050, 74.04.055, 74.04.057, and 74.04.510. 03-13-045, 388-450-0080, filed 6/11/03, effective 8/1/03. 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.]

Washington State Code Reviser's Office