Self-vendored people & SSI - "What if I make a profit?"
1. The following are key income exclusions that apply to earned income (SSA Handbook #2136*):
* Note: SSA has been known to change these section numbers in the past.
2. Net earnings from self-employment are determined on an annual basis and allocated equally
over a 12 month period. (SSA Handbook #2134 * )
In fact, it is very helpful for an individual to make a small amount of income from his or her
support business. Along with the SSI guidelines above, the individual is also eligible to receive
an Earned Income Tax Credit - which is like having Uncle Sam provide a small subsidy to the
business.
Worker's Comp Insurance for Self- Vendored Individuals
Household insurance companies are mandated to provide an "In-Servant" rider on homeowners
or renters insurance by state law. To qualify for this coverage, the insured must be the same as
the employer, so we don't believe this will apply to most family-vendored situations.
In the first 90 days of employment, the employee must have worked for at least 52 hours and
have earned at least $100 in wages prior to the accident. (Underwriting manual) So there could
be a problem if someone gets hurt on the job in their first 52 hours of employment. However,
individual companies may have their own provisions too.
There is also the issue of more than two unrelated people living together. Our agent says that is
with respect to who is covered under the policy - not how many live together under one roof. In
other words, the requirement is that only two unrelated people can be named as policyholders on
the renters policy.
Be sure that you are talking to an agent someone with more than 6 months experience because
they may not be familiar with "In-Servant" coverage.
Withholding Taxes for Self-Vendored Individuals
Individuals who are self-vendored pay all the required federal withholding taxes at the end of the
year with their income tax return on Schedule H. This may be the first time many folks who have
become self-vendored will have to file a tax return!