Part II of the Schedule E will also show if the involvement in the Partnership or "S" Corporation is passive or nonpassive. If the involvement is passive, the income is treated as unearned income. If the involvement is nonpassive, the income is treated as earned.
If a household member is an employee of a regular, or "C" Corporation, s/he will receive a W-2; income from this source is reported on Line 7 of their 1040 and is treated as regular wages. A copy of the Corporate tax return, IRS Form 1120, is not required, only verification of the income received from the Corporation.
As a general rule, the more documentation that is initially provided, the more promptly a determination of countable income can be made. When submitting documents to Economic Assistance for a determination of countable income, please include the household's 1040, any schedules (such as the Schedule A, Schedule E, Schedule F, etc.) accompanying the household's tax return, and the N-FOCUS Master Case Number.
(Rev. November 1, 1999)