7 CFR § 273.9(d)(2) & 7 CFR § 273.11(a)(2) and (c)(1)-(3) & 7 CFR § 273.18(c)

Subtract 20% of countable gross earned income.  

Note: For self-employment income, apply the 20% gross earned income deduction after subtracting allowable business expenses and adding other earned income, but before offsetting any remaining farm self-employment losses.  See Self-Employment, Self-Employment Loss.

Exception:  Do not allow the 20% gross earned income deduction when determining an overpayment amount if the EDG failed to report earned income correctly or timely. See Overpayment for more details.