Offset of Losses 430-05-30-55-25

(Revised 01/01/04 ML2893)

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IM 5192

Loss Other than Farm/Ranch

One self-employed business may offset a second self-employed business, but cannot offset any other type of income.

 

Example:

1. A SNAP household contains a self-employed barber and a self-employed beauty operator. One business can offset the other business.
2. A SNAP household contains a self-employed web designer operating at a loss and a self-employed farmer operating at a gain.  The loss from the web designer can offset the gain from the farm.  

TECS does not automatically compute the monthly maximum offset for losses other than farm/ranch.  The worker must offset this prior to entering income into TECS.

 

Farm/Ranch Loss

After subtracting the allowable costs of producing income from farm/ranch self-employment income (including capital gains), if there is a loss it is averaged in the same manner as net income.

 

The averaged farm/ranch loss is used to offset any other SNAP countable income received by the household during the months over which it has been averaged.

Example:

A farmer/rancher with a $6,000 self-employment loss, as determined by the most recent income tax return, is assigned a 6-month review period. The $6,000 loss is divided by 12 and $500 per month is the averaged loss used to offset any other gross monthly countable income the household may receive.

 

Farm losses, not used to offset other countable income during the period over which they are averaged, are not carried over to a subsequent period.

 

The order of farm/ranch loss offset is: 

1. Other self-employment income.
2. Earned income (after having applied the earned income deduction which is calculated by TECS).
3. Unearned income.

 

Example:

There is a monthly farm/ranch loss offset of $500. The household has other self-employment of $250 per month, regular earnings of $200 per month, and other unearned income of $90. Countable SNAP income is zero, arrived at as follows:

 

$-500 Farm/Ranch loss offset

+250 Other self-employment income 

+160 ($200 - 20% wages) 

 + 90 Other unearned income unused

    -0- Countable SNAP income 

 

The offset applied in a given month is not to exceed the maximum offset for that month and may vary based on the household’s other countable income.

 

Offset amounts are applied in accordance with normal prospective procedures.

 

TECS will automatically compute the monthly maximum offset when the worker uses the self-employment work screen (SEEW). TECS does not store any of the data from SEEW, a copy of the work screen should be printed and placed in the case file before leaving that screen.