TN 9 (02-98)

RS 01803.001 Net Earnings From SE — General Rule

POLICY

The earnings of self-employed individuals are called net earnings from self-employment (NESE) and self-employment income (SEI). Entitlement is based on SEI and deductions are based on NESE.

The Omnibus Budget Reconciliation Act (OBRA) of 1989, P.L. 98-21, added sections 164(f) and 1402(a)(12) of the Internal Revenue Code and section 211(a)(11) of the Social Security Act to provide for a new deduction of 7.65% (100% - 7.65% = 92.35% or 0.9235) when computing NESE. This is a mandatory deduction effective with taxable years beginning after 12/31/89.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0301803001
RS 01803.001 - Net Earnings From SE -- General Rule - 03/17/1998
Batch run: 01/27/2009
Rev:03/17/1998