Net Earnings from Self-Employment (NESE) is the gross income derived by an individual
from any trade or business carried on by that individual less the allowable deductions
which are attributable to that trade or business.
The NESE must be at least $400 for a taxable year before any NESE will be taxable
and creditable as SEI; except that certain “church” employees who are treated as self-employed
must report earnings of $100 or more see RS 01802.234.
NOTE: Effective with taxable years beginning after 12/31/89, a new deduction of 7.65% is
required when computing NESE.
See RS 01803.001 and RS 01803.002 for a discussion of NESE.
The self-employed individual cannot be a nonresident alien, except as provided by
international agreements, see RS 01803.050 for a discussion of the effect of residence and citizenship in determining NESE.