FAA4.J Self-Employment Income (SEEI SEEW) : 05 Types of Self-Employment Income : T Small Businesses
Small Businesses
 
(01/01/19 - 12/31/19)
Income from a small business is countable and is considered self-employment when it meets the self-employment definition.
 
Small businesses include, but are not limited to the following:
 
●Franchise
A business that is owned and operated by one or more persons. The business is under contract with another company.
●Partnership
A business that is owned and operated by more than one person.
●Independent Contractor
A person who provides goods and services to another person or business under terms specified in a written or verbal contract.
 
EXCEPTION
Income received by an independent contractor that does not meet the self-employment definition is not considered self-employment income. (See Contract Income)
 
●Limited Liability Company (LLC)
An LLC is a business owned and operated by one or more persons. (See LLC)
 
EXCEPTION
Income received from an LLC, by employees that are not an LLC member or owner, is not considered self-employment income. (See Wages and Salaries)
 
Income received from an LLC that files taxes as a corporation is not considered as self-employment income. (See Corporation Profits.)
 
●Sole Proprietorship (Owner Operator)
A business that is owned and operated by one individual.
 
When the self-employment definition is not met, consider another type of earned income.
 
When expenses are incurred, see Allowable Business Expenses.
 
Key OB in the INCOME TYPE field on SEEI.
 
WARNING
When money is withdrawn from an LLC business account to pay for personal expenses and the business has elected to be treated as a corporation, the money is countable as earned income. (See LLC – personal expenses)
Wages and profits received from a corporation are not considered self-employment income. (See S Corporation and Corporation Profits)
Profits from a nonprofit corporation (i.e. 501C) are not distributed to the members of the corporation. When income for services rendered is received from a nonprofit corporation, see Wages and Salaries.