Analysis Used to Determine Effect on Small Businesses
The primary effect of the rule is to incorporate existing department policy into rule.
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SECTION 1. DCF 201.036 (3m) is created to read:
DCF 201.036 (3m) Self-employment. (a) Requirement to file taxes. Regardless of the amount of a parent’s net income, a parent whose approved activity is self-employment shall file personal and business tax returns with the internal revenue service if the parent’s gross income from the previous year included income from self-employment.
(b) Income information to agency. Except as provided in par. (c) 1., a parent is eligible for the child care subsidy program when the parent’s approved activity is self-employment only if the parent submits copies of the parent’s most recent personal and business tax returns to the child care administrative agency with the parent’s initial request for assistance and at each annual eligibility redetermination.
(c) Self-employment income reports. 1. Prior to a parent filing a business tax return with the internal revenue service, the parent shall submit documentation of the parent’s actual or anticipated business income and expenses to the child care administrative agency on a form prescribed by the department at the times specified in par. (b). This subdivision only applies prior to the parent’s first deadline for filing a business tax return under par. (a), including any extension granted by the internal revenue service.
2. If a parent alleges that the business tax return required under par. (b) is not representative of the parent’s business income and expenses in the current tax year, the parent may submit documentation of business income and expenses subsequent to the information in the tax return on a form prescribed by the department, in addition to the tax returns required under par. (b). The child care administrative agency shall review the documentation and use the more recent information for eligibility and authorizations if it determines there has been a significant change in the parent’s business income and expenses.
(d) Additional verification. 1. A child care administrative agency may require a parent to provide additional verification of the parent’s business income and expenses within 7 days if the agency believes the documentation provided under par. (b) or (c) is questionable or may be falsified.
2. The child care administrative agency shall determine that the parent’s self-employment is not an approved activity if the parent does not submit the additional verification requested by the agency within 7 days or the information provided by the parent does not resolve the agency’s questions.
(e) Income threshold for ongoing business. A child care administrative agency shall determine that a parent’s self-employment is a hobby and not an approved activity if the parent does not have an annual net business income of at least $400 when the maximum numbers of hours in the parent’s authorization is determined under s. DCF 201.039 (8m) (b). SECTION 2. DCF 201.039 (8m) is created to read:
DCF 201.039 (8m) Authorizations for a parent who is self-employed. (a) New business. 1. For purposes of this subsection, a child care administrative agency shall consider a parent’s self-employment to be a new business for the 24 months following the date that the parent reports beginning the business, except as provided in subd. 4. The child care administrative agency may consider a parent’s self-employment to be a new business until the parent’s eligibility redetermination following the end of this 24-month period.
2. Notwithstanding subd. 1., if a parent switches to a different type of self-employment during the time period specified in subd. 1., the child care administrative agency shall consider the parent’s subsequent type of self-employment to be a new business only until the end of the time period for the initial business.
3. While a parent’s self-employment is a new business for purposes of this subsection, the child care administrative agency may authorize payment for the number of hours of child care that the parent states is needed, up to a maximum of 50 hours per week.
4. After the end of the time period specified in subd. 1. or 2., the child care administrative agency shall determine the maximum number of hours of child care that may be authorized for a parent who begins a new type of self-employment under par. (b).
(b) Ongoing business. 1. If a parent’s self-employment is not considered a new business under par. (a), the child care administrative agency shall determine the maximum number of hours of child care that may be authorized for the parent per week as follows:
a. Calculate the parent’s average monthly gross income from self-employment based on the parent’s annual gross business income as reported to the internal revenue service.
b. Divide the parent’s average monthly gross income from self-employment by the higher of the hourly minimum wage under state or federal law and divide that amount by 4.3 weeks.
2. After determining the maximum number of the hours that may be authorized, the child care administrative agency shall assess the assistance group’s child care needs under sub. (1).
SECTION 3. EFFECTIVE DATE. This rule shall take effect the first day of the month following publication in the Administrative Register, as provided in s. 227.22 (2) (intro.), Stats.
