R994-207-104. Self-Employment

(1) Self-employment includes services which are performed for the direct or indirect purpose of obtaining a livelihood or a part of such livelihood. Self-employment is generally established as a sole proprietorship or partnership. An individual is not self-employed when a farm is operated only to supplement the family food supply or as a place on which to raise the family, but is not operated for the purpose of selling produce. Individuals in self-employment must report time spent engaged in self-employment activities such as time spent about the place of business either working or awaiting calls for goods or services and time spent seeking customers or business for the self-employment venture.

(a) Income from Self-Employment.

Some claimants are engaged in part-time, self-employment which produces an immediate, readily determined weekly income. Claimants must report the amounts received for goods bought, supplies purchased, services, rent, etc. These are reasonable business expenses which can be deducted from gross income for goods and services. Payment of loans for buildings or equipment used in the business are not a deductible expense. Claimants engaged in this type of self-employment must maintain detailed records describing each item of income and expense. The Department may audit those records without prior notice.

(b) Income Not Readily Determinable.

(i) When an individual is engaged in an enterprise that on a year-round basis is less than full-time and the income cannot be clearly determined for each week, the weekly earnings will be determined on the basis of all available information concerning past income and expenses of the enterprise, from which a weekly amount will be computed to represent the potential net income. The amount determined must be reported on the weekly claim. Evidence of changes in the enterprise that would affect the potential income for the present must be reported to the Department and the reportable income will be re-evaluated. Furnishing evidence of past income and expenses is the claimant's responsibility and may be obtained from personal or business records, income tax returns, etc. for the past three years. It will then be averaged to determine a potential weekly amount to be reported each week by the claimant. A claimant may earn up to 30% of his weekly benefit amount in total self-employment plus work for wages before a reduction is made in the unemployment insurance payment for that week. When the estimated income amount equals or exceeds the weekly benefit amount, the claimant is "not unemployed" and benefits will not be allowed.

(ii) When a claimant has just entered into a new business or is expanding and has no actual income experience which may be used as evidence of potential income for the current period, he must make a reasonable estimate. This may be based on any available evidence such as a general knowledge of current prices of products bought and marketed, estimated yields, estimated expense, etc. Any estimated amounts should be so identified.

(c) Over Estimates of Income.

If the Department or claimant has over estimated the amount reportable in self-employment, the claimant may make a claim for the amount owed. The claim must be made within 30 days of when the correct earnings were determinable.