7 CFR § 7 CFR 273.10(d)(3)-(5) & 7 CFR § 273.11(a)(2) and (b)(1)


Allowable self-employment expenses include, but are not limited to:

  • Advertisement costs
  • Business portion of the total shelter expense
  • Business supplies
  • Insurance for buildings, business vehicles, machinery, and trade
  • Labor expenses, including employer taxes, insurance premiums, and wages
  • Lease or rental payments, including for equipment, storage, warehouse
  • Legal and professional fees 
  • Licensing fees and permits
  • Lodging while away from home 
  • Maintenance and repairs on business equipment and property
  • Payments (principal and interest) for the purchase prices of income-producing real estate, capital assets, equipment, machinery 
  • Providing meals for non-EDG members
  • Supplies, including feed, fertilizer, plants, raw materials, seeds, stock
  • Taxes paid on income producing property


Convert the allowable expenses to a monthly amount following annualizing or averaging income policy.


Business Expense vs EDG Shelter Expense

7 CFR § 273.9(d)(6)(ii)(A)-(E) & 7 CFR § 273.11(b)(1)


Allow only the business portion of the total shelter expense when the business is located in the home or on the home property. Prorate the self-employment expense based on the percent of the property used for an in-home office or if it is on the home property.  Allow the remaining portion as the EDG’s shelter expense deduction.


Note: Do not count the same deductions twice, as both shelter costs and self-employment expenses.


Example: The applicant has a gift shop in her home where she sells handmade jewelry. The home has 6 rooms including the gift shop. Divide the basic shelter costs for the building by 6 (rooms) and allow 1/6 of the cost as a self-employment expense. Allow the EDG 5/6 of the basic shelter costs and the appropriate utility standard as its shelter expense. Do not allow any of the utility costs as a self-employment expense.


Disallowed Self-Employment Expenses

7 CFR § 273.11(b)(2)(i)-(iv)


The following self-employment expenses are not allowed:

  • Amounts exceeding the payment made by a boarder
  • Depreciation 
  • Fines and Penalties
  • Income taxes:
    • Federal 
    • State
    • Local
  • Personal expenses including but not limited to:
    • Charitable contributions
    • Dependent care – allowed as a dependent care deduction
    • Funds for the owner’s retirement or health insurance
    • Life and medical insurance payments
    • Normal living expenses
    • Portion of shelter expenses used for the home
    • Transportation to and from the work site