Averaging Self-employment Income and Assigning Certification Periods

(A) Self-employment income that represents a household's annual support shall be averaged over a 12-month period, even if the income is received in a shorter period of time during that 12 months. For example, self-employment income received by farmers shall be averaged over a 12-month period if the income is intended to support the farmer on an annual basis. This self-employment income shall be annualized even if the household receives income from other sources in addition to self-employment. However, if the averaged annualized amount does not accurately reflect the household's actual circumstances because the household has experienced a substantial increase or decrease in business, the self-employment income shall be calculated on anticipated earnings. The worker shall not calculate self-employment income on the basis of prior income (documented by income tax returns) when the household has experienced a substantial increase or decrease in business.