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Wisconsin Department of Health and Family Services Obsolete Medicaid Eligibility Handbook For the current MEH, see http://www.emhandbooks.wi.gov/meh-ebd/ For the current BC Plus Handbook, see http://www.emhandbooks.wi.gov/bcplus/ |
All self-employment income Income is anything you receive in cash or in kind that you can use to meet your needs for food, clothing, and shelter. is earned income, except royalty income and some rental income (4.2.4.1).
Self-employment income is income that is reported to IRS as farm or other self-employment income or as rental or royalty income. When income isn't reported to IRS, you must judge whether or not it is self-employment income.
Self-employment income sources are:
Business. Income from operating a business.
Capital Gains. Income from selling securities and other property.
Rental. Rental income is rent received from properties owned or controlled. Rental income is either earned or unearned. It is earned only if the owner actively manages the property on an average of 20 or more hours per week. It is unearned when the owner reports it to the IRS as other than self-employment income.
Use "net" rental income in the eligibility determination. "Net" rental income means gross rental receipts minus business expenses.
When the owner isn't an occupant, net rental income is the rent payment received minus the interest portion of the mortgage payment and other verified operational costs.
When a life estate (4.5.8.1.5) holder moves off the property and the property is rented, net rental income is the rent payment received minus taxes, insurance, and operational costs. The operational costs are the same as the costs the holder was liable for when living on the property.
When the owner lives in one of the units of a multiple unit dwelling, compute net rental income as follows:
Add the interest portion of the mortgage payment and other operational costs common to the entire operation.
Multiply the number of rental units by the total in step 1.
Divide the result in step 2 by the total number of units, to get the proportionate share.
Add the proportionate share to any operational costs paid that are unique to any rental unit. This equals total expenses.
Subtract total expenses from the total rent payments to get net rent.
Royalties. Royalty income is unearned income received for granting the use of property owned or controlled. Examples are patents, copyrighted materials or a natural resource. The right to income is often expressed as a percentage of receipts from using the property or as an amount per unit produced.
This page last updated in Release Number: 02-01
Release Date: 10-01-01
Effective Date:10-01-01
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