Okla. Admin. Code § 340:10-3-32

Current through Vol. 42, No. 7, December 16, 2024

Section 340:10-3-32 - Earned income determination

(a)Self-employment income determination. Self-employment income received by an assistance unit member from a self-employment business enterprise he or she owns solely or in part; or from an employer when the assistance unit member is considered self-employed, per Oklahoma Administrative Code (OAC) 340:10-3-31(a), is considered per the procedures listed in (b) of this Section. Other types of self-employment income are listed in (1) through (4) of this subsection.

(1)Room or board. When a person:

(A) rents a room in the client's home, the worker subtracts 25 percent of the gross earned income amount received as a business expense; or

(B) pays for room and board in the client's home, the worker subtracts 50 percent of the gross earned income as a business expense.

(2)Rental property. Income from rental property is considered earned self-employment income when an outside person or agency does not conduct any of the activities associated with renting the property. When the client does not manage the rental property, it is considered unearned self-employment income. When the client incurs business expenses, such as a mortgage payment, the worker subtracts 50 percent of the client's rental property income as a business expense.

(3)Profit sharing. Households who operate S corporations, general or limited partnerships, or limited liability companies (LLC), may receive profit sharing that is reported on the household's personal income tax return.

(A) S corporation profit sharing is considered unearned profit-sharing income. Refer to (c)(3) of this Section and OAC 340:10-3-39(o) for information regarding S corporations.

(B) Partnerships are unincorporated businesses with two or more partners. When an assistance unit member is a partner in a business, he or she is considered self-employed and not an employee of the business. Each partner receives a profit share from the business. When a business is considered a:

(i) general partnership or LLC with a member-manager, each partner's share of the business income is shown as self-employment income on his or her federal income tax form; or

(ii) limited partnership or other LLC member, each partner's share of the business income is shown as self-employment income or unearned profit-sharing income on his or her federal income tax form.

(4)Home produce. Any home produce from garden, livestock, and poultry utilized by the client and his or her household for their consumption is not considered in determining the Temporary Assistance for Needy Families (TANF) benefit amount. Any home produce sold to others is considered as self-employment income.

(b)Self-employment income procedures. Self-employment income that represents the assistance unit member's annual support is prorated over a 12-month period, even when the income is received in a shorter time period. The worker uses the gross self-employment shown on the person's most recent federal tax return, when filed, or computes the member's gross self-employment income from the member's business or employer records. When the member claimed business expenses, the worker subtracts 50 percent of the member's gross self-employment income as business expenses and divides the remaining income by the number of months to be averaged to arrive at the member's net monthly self-employment income.

(1)New income source. When self-employment income is received for less than a year, the income must be averaged over the time period received and the monthly income projected for the coming year.

(2)Averaged over time period received. When there is insufficient data to make a reasonable income projection from this income source, the worker does not consider income from this source until the six-month renewal. At renewal, the worker averages the income over the number of months received until a full year's data information is available.

(3)Substantial increase or decrease in income. When the assistance unit member experiences a substantial increase or decrease in income, the worker does not use prior self-employment income, such as income tax returns, to calculate anticipated self-employment income. Instead, the worker only uses the self-employment income that can reasonably be anticipated to project future earnings.

(c)Earned income from sources other than self-employment.

(1)Earned income from wages, salary, or commission. When the income is from wages, salary, commission, or contract employment, the earned income is the gross income prior to payroll deductions and withholdings. Money from the sale of whole blood or blood plasma is also considered as earned income.

(2)Earned income from work and training programs.

(A)Workforce Innovation and Opportunity Act (WIOA) of 2014. Per Section 181 of WIOA, earned income from WIOA is exempt.

(B)On-the-job training (OJT). Earned income from OJT is considered as any other earned income.

(3)S corporations. When an assistance unit member is a shareholder in an S corporation, he or she may receive profits from the business in three ways; as a salary, as a profit share of the business, or as salary and a profit share of the business. Salaries and profit share of the business are reported on the household member's personal income tax return. Salary income is considered as earned income and profit share income is considered as unearned income.

(d)Earned income determination. TANF cash assistance benefit amount is determined based on actual gross income received in the current or past month, when known, and the best estimate of anticipated gross income for future months.

(1)Income verification. When income verification is needed, the worker gives or sends Form 08AD092E, Client Contact and Information Request, to the client specifying the income verification needed and gives the client at least 10-calendar days to provide the verification.

(A) When an application includes a past month, the worker obtains actual income, when available, to determine income eligibility for the application month.

(B) Once the client provides acceptable verification, no further information is required unless a change occurs or the renewal is due.

(C) When the client reports new employment and has not received representative pay yet, the worker determines the best estimate from information provided by the client and the employer.

(2)Varying income. When the assistance unit member receives income in varying amounts, the worker averages the most recent 30-calendar days of income to anticipate income for future months unless the:

(A) member starts new employment and paystubs are not available. When pay stubs are not available, the worker contacts the employer to obtain the member's hourly wage, anticipated weekly hours, and pay frequency;

(B) hourly wage changes. The worker obtains a paystub(s) that shows the member's new hourly rate, uses the past 30-calendar days of paystubs to average the member's weekly hours, and multiplies the hours by the new pay rate to anticipate income. When a paystub showing the new hourly rate is not available, the worker contacts the employer to verify the new hourly rate;

(C) member's work hours change. When paystubs are not available, the worker contacts the employer to verify the increase or decrease in hours. The worker multiplies the new hours by the hourly wage to anticipate the member's new earnings;

(D) member obtains a second job. The worker averages the client's first 30-calendar days of paystubs from the second job, when available, or contacts the employer to obtain the member's hourly wage, anticipated weekly hours, and frequency of pay. The worker computes the monthly earnings from each job separately and then adds the earnings together for the total month's gross earnings; or

(E) paystubs are not representative of the normal circumstances. In this instance, the worker only uses the representative paystubs to anticipate future income.

(3)Income conversion to monthly amount. When the assistance unit member receives income more often than monthly, the worker converts the income to a monthly amount as described in (A) - (D) of this paragraph. Income received:

(A) on a daily basis is converted to a weekly amount, then multiplied by 4.3;

(B) weekly is multiplied by 4.3;

(C) twice a month is multiplied by 2; or

(D) every two weeks is multiplied by 2.15.

(e)Benefit changes. The client is responsible for reporting income changes within 10-calendar days of when the change takes place. The worker is responsible for taking timely action within 10-calendar days of the date the client reports the change. All client notices must include the timely reporting requirement.

(1) The TANF cash assistance benefit may be closed based on actual or anticipated earnings when the assistance unit's net income is over the payment standard, per Oklahoma Human Services Appendix C-1, Schedule IX. To determine net income, the worker subtracts the earned income disregard, when applicable, per OAC 340:10-3-31.1 and the earned income exemptions, per OAC 340:10-3-33, from gross earned income.

(2) The TANF benefit may be reopened due to administrative error, per OAC 340:65-5-6, when the client reports within 30-calendar days of the effective closure date that the anticipated income was not received or was less than expected and did not cause ineligibility.

Okla. Admin. Code § 340:10-3-32

Amended at 10 Ok Reg 527, eff 12-8-92 (emergency); Amended at 10 Ok Reg 2813, eff 6-25-93; Amended at 12 Ok Reg 3446, eff 6-16-95 (emergency); Amended at 13 Ok Reg 2167, eff 6-14-96; Amended at 14 Ok Reg 947, eff 2-1-97 (emergency); Amended at 14 Ok Reg 1310, eff 5-12-97; Amended at 15 Ok Reg 145, eff 11-1-97 (emergency); Amended at 15 Ok Reg 1602, eff 5-11-98; Amended at 17 Ok Reg 2271, eff 5-1-00 (preemptive); Amended at 18 Ok Reg 2055, eff 7-1-01; Amended at 20 Ok Reg 850, eff 6-1-03; Amended at 21 Ok Reg 814, eff 5-1-04; Amended at 23 Ok Reg 980, eff 6-1-06; Amended at 24 Ok Reg 2183, eff 7-1-07; Amended at 27 Ok Reg 2788, eff 8-1-10 (emergency); Amended at 28 Ok Reg 781, eff 6-1-11; Amended at 29 Ok Reg 748, eff 7-1-12

Amended by Oklahoma Register, Volume 34, Issue 24, September 1, 2017, eff. 9/15/2017

Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/15/2020

Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/15/2022