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• When another adult in the household receives payment of wages,
contract payments, or crew shares for work in the self-employment
enterprise, the amount paid to the adult is an allowable cost of
doing business when allowing actual deductions and the
wages/shares count as earned income to the adult receiving the
payment. The amount paid to the adult is deducted from the gross
self-employment income for the enterprise.
In other situations, the self-employment enterprise may be established
as a partnership or S-corporation and more than one household
member may share in the total business income. In these situations,
the income received is counted as income as described in the following
section.
b. Partnerships and Corporations
Most self-employment enterprises are owned and operated by a single
individual and all of the business income belongs to that individual.
These are known as sole proprietorships and the individual’s
countable income from these enterprises is determined by subtracting
the total allowable costs of doing business from the total business
receipts. Any salary or disbursement received by the individual from
the business is not considered in the calculation of the gross selfemployment
income. These amounts are not allowable costs of doing
business and are not deducted from the gross self-employment income
for the enterprise.
Self-employment enterprises may also be formed as partnerships and
corporations, which means that business income is shared.
Following are descriptions of these types of enterprises.
1. Partnerships
Some enterprises involve a partnership, which means two or more
individuals have agreed to manage the business together and share
the business income. A written agreement is not required for a
partnership to exist, but there may be one. An individual’s countable
income from these enterprises is determined by subtracting the total
allowable costs of doing business from the total business receipts,
and dividing the amount by each partner’s share. The share of
income from a partnership is countable even if it is not distributed.
Any salary or disbursements received by the individual from the
business is not considered in the calculation of the gross selfemployment
income. These amounts are not allowable costs of
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