461-145-0920    Effective 01/01/21
Self-Employment; Costs that are Excluded to Determine Countable Income

  1. This rule explains how to determine which costs are excluded from gross self-employment income.

  2. In all programs except the DSNAP, OSIP, OSIPM, and QMB programs, unless prohibited by section (4) of this rule, and subject to the provisions of sections (7) and (8) of this rule and OAR 461-145-0930, the necessary costs of producing self-employment income are excluded from gross sales and receipts including, but not limited to:

    1. Labor (wages paid to an employee or work contracted out).

    2. Materials used to make a product.

    3. In the SNAP program - principal and interest paid to purchase income-producing property (see OAR 461-001-0000), such as real property, equipment, or capital assets. In all other programs, interest paid to purchase income-producing property, such as equipment or capital assets.

    4. Insurance premiums, taxes, assessments, and utilities paid on income-producing property.

    5. Service, repair, and rental of business equipment, including motor vehicles, and property that is owned, leased, or rented.

    6. Advertisement and business supplies.

    7. Licenses, permits, legal, or professional fees.

    8. Transportation costs at 20 cents per mile, if the cost is part of the business expense. Commuting expenses to and from the worksite are not part of the business expense.

    9. Charges for telephone service that are a necessary cost for self-employment.

    10. Meals and snacks provided by family day care providers for children in their care, except the provider's own children. The actual cost of the meals is used if the provider can document the cost. If the provider cannot document the actual cost, the USDA meal reimbursement rates are used.

    11. Materials purchased for resale, such as cosmetic products.

    12. For newspaper carriers, the cost of newspapers, bags, and rubber bands.

  3. In the OSIP, OSIPM, and QMB programs, unless prohibited by section (5) of this rule, and subject to the provisions of sections (7) and (8) of this rule and OAR 461-145-0930, the necessary costs of producing self-employment income are excluded from gross sales and receipts including, but not limited to:

    1. Advertising.

    2. Car and truck expenses.

    3. Commissions and fees.

    4. Contract labor.

    5. Depletion.

    6. Depreciation.

    7. Employee benefit programs.

    8. Insurance, other than health.

    9. Mortgage interest.

    10. Legal and professional services.

    11. Office expenses.

    12. Pension and profit-sharing plans.

    13. Rent or lease of vehicles, machinery, equipment, and other business property.

    14. Repairs and maintenance.

    15. Supplies.

    16. Taxes and licenses.

    17. Travel, meals, and entertainment.

    18. Utilities.

    19. Wages, less employment credits.

    20. Meals and snacks provided by family day care providers for children in their care, except the provider's own children. The actual cost of the meals is used if the provider is able to document the cost. If the provider is unable to document the actual cost, the USDA meal reimbursement rates are used.

    21. Materials purchased for resale, such as cosmetic products.

    22. For newspaper carriers, the cost of newspapers, bags, and rubber bands.

  4. In all programs except the OSIP, OSIPM, and QMB programs, the following costs are not excluded from gross sales and receipts:

    1. Business losses from previous months.

    2. Except in the SNAP program, payments on the principal of the purchase price of income-producing real estate and capital assets, equipment, machinery, and other durable goods.

    3. Federal, state, and local income taxes, draws or salaries paid to any financial group member, money set aside for personal retirement, and other work-related personal expenses, such as transportation, personal business, and entertainment expenses.

    4. Depreciation. For purposes of this section, "depreciation" means a prorated lessening of value assigned to a capital asset (see OAR 461-001-0000) based on its useful life expectancy and initial cost.

    5. Costs related to traveling to another area to seek business when there is no reasonable possibility of deriving income from the trip.

    6. Interest or fees on personal credit cards.

    7. Personal telephone charges.

    8. Shelter or utility costs associated with the individual's home, except as authorized by section (7) of this rule.

  5. In the OSIP, OSIPM, and QMB programs, the following costs are not excluded from gross sales and receipts:

    1. Federal, state, and local income taxes.

    2. Costs related to traveling to another area to seek business when there is no reasonable possibility of deriving income from the trip.

    3. Interest or fees on personal credit cards.

    4. Personal telephone charges.

    5. Shelter or utility costs associated with the individual's home, except as authorized by section (7) of this rule.
  6. In the DSNAP (461-101-0010) program, self-employment costs include out of pocket disaster-related expenses the household has paid or is expected to pay during the disaster benefit period authorized by FNS and where the expenses are not expected to be reimbursed during the disaster period. If the household has received or reasonably anticipates receiving a reimbursement for part or all of the expenses during the disaster benefit period, only the net expense to the household is deductible. The necessary costs of producing self-employment income are excluded from gross sales and receipts including, but not limited to:
    1. Damage or destruction to self-employment business.
    2. Equipment and supplies.
    3. Disaster-damaged vehicle expenses.
    4. Business property protection.
    5. Storage.
    6. Clean-up.
    7. Costs paid by credit card are excluded unless the bill is also paid during the benefit period.
    8. Costs listed in (2) that are incurred during the disaster benefit period.
  7. The exclusions for items used for both business and personal purposes, such as automobiles and a residence, including utilities, are limited by the following subsections:

    1. In the ERDC, OSIP, OSIPM, and QMB programs, the portion of the expense that is for business use only is excluded.

    2. In the SNAP program, costs are excluded for a separate office or shop located on the property used as a home, if the costs are billed separately from the residence. Costs for other items used for both business and personal use are excluded.

  8. If no member of the financial group (see OAR 461-110-0530) has been self-employed for a sufficiently long period to ascertain the costs of self-employment, the costs may be estimated.

Statutory/Other Authority: ORS 409.050, 411.060, 411.070, 411.083, 411.404, 411.816, 412.006, 412.049, 413.085, 414.685
Statutes/Other Implemented: ORS 409.010, 409.050, 411.060, 411.070, 411.083, 411.404, 411.816, 412.006, 412.049, 413.085, 414.685, 414.839

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