SNAP Says My Self Employment Income Is Too High, but That's Before My Business Expenses. Can They Really Count It That Way?

What happened

A SNAP decision seems based on total business revenue. It does not look at what was kept after costs. This is a common mix up. Federal rule requires using the net figure. It should not use the gross one.

What usually applies

SNAP must add up your gross self employment income first. Then it must subtract the cost of producing that income. Then it divides the rest by the number of months. Some costs do not count as business costs under this rule. This includes income taxes and retirement savings. It also includes other personal work costs. Those are handled by a different rule instead. This is SNAP's 20 percent earned income deduction.

What to do

1. 1

   List your actual business expenses separately from gross receipts

   The rule requires subtracting your true business costs from revenue. A clear breakdown between the two matters.

2. 2

   Ask your caseworker which averaging method your state uses

   States can do this differently. Some use a standard deduction instead of itemized expenses. This is for very small businesses.

3. 3

   Bring records that separate business costs from personal expenses

   Income taxes and retirement savings do not count as business costs. Keep those separate from your true business expenses.

4. 4

   Ask about the 20 percent earned income deduction

   This separate deduction applies to earned income in general. It can matter alongside your self employment math.