EXAMPLE 1:
Tina. Bell, an SSI recipient, reports at a redetermination that they began babysitting
Tina's grandchild while the children's parent, Martha is working. Sometimes Tina has
the child at Tina's home, but as a general rule, Tina goes to Martha's home because
the child's toys and other items are there. Tina does not babysit for anyone else.
Tina receives about $20 a week from Martha.
Although a caregiver is a recognized occupation, Tina is not holding themself out
as a provider of daycare services, nor does Tina have intent to produce income. The
CR determines that Tina is not self-employed.
However, if the income meets the definition of wages for the title II annual earnings
test (e.g., an employer/employee relationship exists between Tina and Martha), it
would be considered wages even though no FICA taxes are being deducted. If a determination
is made that the activity does not result in wages or NESE, then the income derived
by the activity is unearned income, coded as type SW on the SSR.
EXAMPLE 2:
Simon is filing for SSI aged benefits. When asked about any income they receive, Simon
indicates that they does babysit for various neighbors and friends, but does not consider
themself as self-employed and files no tax forms for this income. Simon began providing
these services when their own children were young to make some extra money. Simon
relies on obtaining new business via word of mouth. Although Simon does not consider
themselves in the daycare business, they meet all of the factors indicating the existence
of a trade or business in RS 01802.002. Therefore, the CR determines that Simon is self-employed and institutes development
of the NESE.
EXAMPLE 3:
Matt. Lyons, an SSI recipient, reports that since they needed extra money to meet
their rent and food expenses, Matt began to collect aluminum cans off the street to
redeem at the recycle center for cash. In addition, sometimes their neighbors or local
organizations contact Mattto pick up their cans. Matt does not file any tax returns,
but estimates that they make about $200 a month.
Since this is an ongoing, regular activity that includes some third party collection
pickups and was established with the intent of producing income, it is determined
that Mr. Lyons is self-employed and development of the NESE is initiated.
EXAMPLE 4:
Kieth. Kent, at a redetermination, reports they earned some money cutting the lawn
for one of their neighbors. Kieth's car needed some unexpected repairs and they did
not have the money. Keith's neighbor told Keith they would pay Keith $80 a month to
cut the neighbors lawn for the month of July. Since Keith needed the cash to pay for
the repair, Keith decided to cut the lawn. Keith is not holding themself out as a
lawn service. Further, this is not an ongoing regular activity nor does Keith plan
to do this activity to make a profit. Keith only did it to earn enough to pay for
the car repair. Therefore, it's not NESE. However, even though there was no FICA withheld,
the CR should develop whether the income is wages for annual earnings test purposes
(e.g., does an employer/employee relationship exist). If a determination is made that
the activity does not result in wages or NESE, then the income derived by the activity
is unearned income.