TN 19 (06-11)

A. Gross earned income

We count more than what the individual actually receives if the employer or third party withholds amounts from the individual’s earned income because of:

• a garnishment,

• to pay a debt,

• other legal obligation such as taxes ,or

• to make any other payments such as for health insurance.

B. Policy for when to count earned income

Count wages, services in a sheltered workshop, royalties, and honoraria when:

• the individual receives them;

• they are credited to the individual’s account; or

• they are set aside for the individual’s use, i.e., the employer sets aside the wages for payment at a future date as requested by the employee. See SI 00820.115 for information on wage advances and deferred wages.

1. In-kind earned income

We count the current market value of in-kind earned income. If the individual receives an item they have not fully paid for and is responsible for the unpaid balance, count only the paid up value as income.

2. Net earnings from self employment

We count net earnings from self-employment on a taxable year basis. If the individual has net losses from self-employment, we deduct them from the individual’s other earned income (e.g., wages) to determine the amount of countable earned income. We do not deduct the net loss from the spouse’s earned income. If the individual with a net loss does not have other earned income, no deduction is applicable. In addition, we do not deduct self-employment net losses from the individual’s or spouse’s countable unearned income.

C. References

• SI 00810.700, Income of Member of Religious Orders -- General

• SI 00820.100, Wages – General SI 00820.200, Net Earnings from Self-Employment (NESE)

• SI 00820.300, Sheltered Workshops

• SI 00820.450, Royalties and Honoraria