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NATIONAL DISABILITY INSTITUTE
SEPTEMBER 20, 2023
12:30 PM CST

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>> MOLLY SULLIVAN:  Greetings.  Welcome, everybody.  So wonderful to have you all joining us today.  I'm going to give it just a couple more seconds, maybe half a minute for a few more people to join us and then I'll get us started.
For those of you who are comfortable using the chatbox while we're waiting, I'd love to hear where you're joining from.  My name is Molly Sullivan.  And I'd love to know where you all are joining from, if you're comfortable popping in the chatbox maybe what city or even what state you're joining from.
I know we got a pretty big number of people registered for this webinar and from across the country.  Oh, yeah.  Look at that.  Maryland, Tennessee, Virginia, Colorado and Iowa that's great.  New York.  Wonderful.  Fantastic.  Got a lot of folks on the east coast.  That's great.  Welcome to you one and all.  All right.  Well, I'm going to get us started.  I'm actually going to get us started with just a few housekeeping items.
I got a couple housekeeping slides and then we'll get moving into the webinar that you've joined.  So the audio for today's meeting can be accessed using computer audio or by calling in by phone.  If you select computer audio, please make sure that your speakers are turned on or your headphones are plugged in.  To call in, you will want to dial ‑‑ the meeting code ‑‑ and ASL interpreter will have a spotlight throughout the presentation.  For the best viewing experience, please navigate to the speaker view using the options on the top right corner of your screen.  The captions can be found by click the CC button in the Zoom controls at the bottom of the screen.  If you don't see the captions after clicking that CC but option, please just alert the host via the chatbox.
Please send your questions, concerns or any requests for technical assistance to the NDI host via the chatbox.  Questions will be addressed by me as time allows during the webinar.  And if you prefer to ask your question in ASL, please raise your hand and wait to be called on by the host.  And that's just for the sake of managing Q&A.
If your question is not addressed during the webinar, and you're listening by phone or you're unable to use the chatbox, please e‑mail AJONES@NDI‑INC.org.  And please note that the webinar is being recorded and materials will be available at WWW.disabilitysmallbusiness.org.  On the past events page within 1 to 2 weeks.  And one final logistic.  As I move to each slide, you'll notice that there will be a brief pause and I will be pausing to give everybody a moment is to review the content on the slide, a brief look at it before I start sharing information.
Well, hello to everybody and officially welcome to today's session, which is timed reporting business activity on SSI and Medicaid.  So my name is Molly Sullivan and I am with a non‑profit organization called Griffin‑Hammis Sores which we call GHA for short.  GHA is an organization that's been providing training and technical assistance for over 30 years to support people across the spectrum of disabilities to become self‑employed and small business owners.  Now, for this webinar, I'm joined by my incredible colleague Ciara Ladroma and Ciara will be monitoring the chatbox throughout the webinar.  If you have questions about the content, you can pop them up there and Ciara will respond and she'll respond in chat or she'll let me know and I'll address your questions.
And on that note regarding the chatbox, if you haven't already opened the chat, I encourage you to do so.  You can open the chat by clicking the icon that reads chat on the bottom of your Zoom window.  We ask that you use that chatbox to ask questions, share ideas and leave comments.  And we will, as I mentioned, stop for Q&A a couple of times during the webinar.  So if you post a question in the chat, just know there might be a delay until we do Q&A before I tackle it.
Lastly, we want to thank the U.S. small business administration and the National Disability Institute for leading the community navigator pilot program that creates the space for this webinar.
Now, while this webinar is funded by the U.S. small business administration, all of the opinions, conclusions and recommendations that we express here are those of us and don't necessarily reflect the views of the SBA.
And lastly, in terms of some logistics, at the end of this webinar, we'll share information with you about upcoming events and the National Disability Institute team will share information about resources that are available on the small business hub website.
All right?  Let's take a look at the plan for our time together.  So the focus for today's webinar is all about reporting self‑employment activity for the sake of the SSI benefit and the Medicade that comes with it.  Now to tackle this topic, I'm actually going to take a few minutes to make sure everybody knows what SSI is and what the related Medicaid is.  And then once we've got that foundation in place, we'll dig into what do you report and when do you report and how do you report self‑employment activity for the sake of that benefit.  Once we've covered those topics, we'll then look at some tips for reporting and managing the SSI benefit when self‑employed.  Now, I want to acknowledge this is a fairly big agenda.  So given that, I'm actually going to do my best to stay focused on just this topic of reporting for SSI and the Medicade that comes with it.  And what that means is that we won't be covering social security disability insurance, which is the other cash benefit social security administers for people with disabilities.  Nor will we be tackling the Medicare that comes with that benefit.  But I'd like to ‑‑ because we have to keep this pretty focused, what I'd like to do is take just a couple minutes and share with you some ways you can learn about the SSDI and Medicare benefits as well as just learn more about the topics that we're covering today.
So for starters, I want to point out we have more webinars on benefits and self‑employment.  This webinar is actually part of a series that we started last year and that we're finishing up this year.  So in 2022, last year, we actually did five webinars on topics related to benefits and self‑employment.  The first was really just a basic overview of the common public benefits and that one went into some explanation about eligibility for social security disability insurance, Medicare, supplemental security income and Medicaid.
The second webinar was about common business structures and some of the key considerations in choosing a business structure when you receive SSDI, Medicare, SSI and Medicaid.  The third webinar was about social security's plan to achieve self‑support, which we call PAS for short.  And PAS is a way that some people can get some help with starting business expenses.
The fourth webinar we did was with resource exclusions which explained ways businesses like ‑‑ the way businesses assets like bank accounts and equipment can be excluded from financial need based benefit resource limits.  So that webinar covered things like property essential to self‑support, which is a special rule and able accounts and how those can be used for self‑employment.
The fifth webinar we did is we really got into the meat of it.  The fifth webinar covered net earnings from self‑employment and how they're calculated.  And I'm actually going to touch on that topic to our webinar today, but please know we have an entire webinar ‑‑ when we call NESE.  Net earnings and self‑employment.
So now so far in 2023, we've done two more webinars but also get into the meat of it.  We're done one that was about the fact of net earnings from self‑employment on SSI and another webinar that covered the effects of that, NESE on SSDI.  You can access all of those webinars on the disability small business hub website on the events page and Ciara, when you get a minute, if you can pop a link in the chatbox to that website so folks know how to get into those webinars, that would be great.
Now, we're doing two more webinars before the end of the year that are on benefits and self‑employment, one of which can you're attending right now.  The business activity for SSI.  And then we have one more that we'll be doing on reporting self‑employment or business activity for SSDI.  And that one will occur on October 18th from 2:00 to3:30.  And you can use the link Ciara will put in the chatbox to register for that last webinar if you'd like to.
Now, while these webinars can be a great way to build your knowledge, the reality is it can be difficult to take what you learned in this kind of a setting and figure how to apply it to your situation.  So if you or someone you work with would like one on one help understanding how work will affect benefits, how to follow the steps that I'll be sharing around reporting, then I encourage to you reach out to a person that's called a benefits planner.
So a benefits planner is a professional that generally works for a non‑profit or sometimes a state agency or some type of an employment program.  And they specialize in understanding these public benefit work rules.  Now, benefit planners can go by a number of different titles.  It is more of a generic term.  So some of the titles you might hear are community work incentive coordinator, or benefit counselor is another one you might hear.  But really regardless of the title, these professionals what they do is they provide one on one counseling for people with disabilities about changes that can happen to benefits when working and also the details for how to report the benefit agencies when working.
Now in every state, there is at least one benefit planning program called a Work Incentive Planning and Assistance Program known as WIPA for short.  And you can find the WIPA project in your area by using the find help feature that's on this choose work website which is ‑‑ it spells out choosework.SSI.GOV.  You can also if navigating a website doesn't work for you, you can also find your local PIPA‑‑ your local WIPA project by calling 866‑968‑6842 or the TTY number.  866‑833‑2967.  The agency may also be providing some benefits planning that's part of the normal services.  So if you or anyone you're working with is receiving services from a VR agency, be sure to ask your VR counselor for find thing a benefit planner.  One other option is contact your local center for independent living and ask them for help in finding a benefit planner.  Centers for independent living are non‑profits and they provide really great support for people who experience disabilities around living independently.  And some ‑‑ actually some have benefits planners on staff.  If they don't, they may be able to help you find a benefit planner in your area.
So on the slide, there's a link to the national directory of CILs and you will have that when you get the materials.  It will be post on the website in 1 to 2 weeks.
So I guess what I would say in summary is there are a number of ways beyond this webinar that you can continue to build your knowledge around benefits and self‑employment.  So as you listen to the details I share and the information I pass along rather than feeling like you have to take it all on and memorize it and learn every detail, um, if you can't set a goal to just build your knowledge a little bit, gain a better understanding of the basics around reporting and if you're receiving benefits, I highly encourage you get connected with the benefit planner who can provide really more personalized support for you and taking this information and putting it into action.  All right.
So with that, let's shift and, um, do ‑‑ begin to build your knowledge a little bit.  What I'd like to do to get us started as I mentioned before is just do a brief review of what SSI is and the related Medicaid.  So you're clear about which benefit this webinar is covering.  We get people who come from all sorts of different backgrounds that join these webinars.  So it's just really important you know which benefit we're talking about when we say the SSI benefit.  So I want to take just a couple minutes to get us grounded on what that is and then we'll dive into the reporting.
Okay.  All right.  So supplemental security income, which is called SSI for short, is a monthly cash benefit that is based on financial need.  And it is also administered by social security.  So there's really three basic eligibility rules for SSI, which I will touch on here.  The first is that the person must meet social security's definition of disability or blindness or you could also get SSI if you're age 65 or older.  That's the first criteria.
The second is that the person must have low resources and resources that term is also referred to as assets.  And so those are things that a person owns that they could use to pay for food and shelter.  So common examples of resource are bank accounts or retirement accounts.
Now, there are some resources in the SSI program that are excluded meaning they don't count.  Social security pretends like they don't exist.  And those are things like this one rural property is essential to self‑support which excludes assets in a trader business, enable accounts are also excluded.  A home you own that you live in is excluded.  Another example is one vehicle.  So there are ‑‑ most assets or resources are counted, but some are excluded.  And for this second eligibility rule, the low resources, the person's, the value of the person's countable resources must be below $2,000.  If a person is married, the countable resources must be below $3,000 to be eligible for SSI.  So that's what I mean by low resources.
Now, the third eligibility criteria is that the person must have low‑income.  So what's income?  Income is money that the person receives in a given month.  So common examples of income are social security disability insurance, that other social security benefit.  That's an example of unearned income.  Another example of income is earnings.  Now, when a person is self‑employment, their net earnings from self‑employment are considered their earnings.  And I'm going to review some details about self‑employment averages later in this webinar.  But for now, I just.  You to have it in your minds when it comes to income, social security does look at earnings‑for‑the sake of the SSI benefit.  Also in terms of income, one of the things that can count is the value of food or shelter the person gets since the SSI benefit is intended to pay for food or shelter.
Now, there are some types of income that don't count like food stamps which is also called SNAP for short.  Subsidy payments don't count, but for the most part, most income counts.  So a person's income needs to be below a particular limit and what social security does is they have some income deductions that will reduce the amount of the person's income.  They figure out how much of a person's income is countable.  When they use that calculation, they do take into account a person's net earnings from self‑employment.  That's one of the types of income.  So they use that in the SSI calculation and figure out how much SSI a person can get and also if it's low enough to be eligible.  Now, we actually did a webinar about net earnings from self‑employment and the effect on SSI.  So that's one of the webinar's I encourage to you check out if you want to learn more about that.  You can also see examples of how this SSI calculation works by going to a website social security has called understanding SSI income.  And Ciara, when you get a minute, if you can put that website in the chatbox, that would be great.  For folks who want to understand how that is calculated, social security has actually some examples on that web page that's understanding SSI income.  So they are looking at income.  That's the third criteria.  But when they look at income, they have these deductions and what's left, countable income has to be low enough.  By low‑income, what they mean is countable income that's below the maximum SSI benefit of $914, which is the amount in most states, the monthly amount in most states this year.  The amount a person receives is actually that maximum SSI benefit of 914 minus their countable income.  So that's how they figure out the SSI benefit amount.  Not only do they use that SSI calculation to find out if your income is low enough, but they use it to benefit the amount.
Okay.  I realize that was a lot.  I know there are folks in this webinar who are very knowledgeable about SSI and folks new to the content of SSI.  If this is new to you, no worries.  Remember just take in as much as you can.  Don't try to retain it all.  For the most part, SSI is a financially based benefit.  And the benefit will be affected, it will go down if you have other income, which is why it is important to report which is what we're going to talk about today.
Now, if you or someone who is receiving a benefit and you're not sure if you're receiving SSI, it is important to figure out which benefits if you're receiving so you know which rues apply to you.  There is a handful of ways if you are receiving SSI.  You could ‑‑ you can log into your my social security account and in there you should see which benefit type you V. we'll say supplemental security income, if you have that one.  You could also call social security and you can ask them to tell you which benefit you have.  That's a great way to figure it out.  Or I should say it can be.  And you can also look at recent letters you've received.
So that's SSI and what it is.  So hopefully you feel clear about which benefit we're talking about today.  I do want to briefly look at Medicaid and how this fits into this picture so you understand how these two can come together.
Okay.  So Medicaid is a financial means base health insurance.  It is funded by a combination of state and federal dollars.  It's really designed and administered by state agencies.  So what's important to know from that is that Medicaid is very different from state to state.  The eligibility rules can vary from state to state coverage rules can vary from state to state.  Even the name of the Medicade program can be different from one state to another.  So given that there is so much difference from state to state, I'm really only going to share some high level information with you about Medicade.  So if you're receiving Medicaid and you're working with someone or you're working with someone who is receiving Medicaid, and you've got some questions about the way self‑employment might affect Medicaid, I really encourage you to check in with a benefit planner.  That's really helpful to you since there can be differences from state to state.  What I can share the a high level is for a person to be eligible for Medicaid, they need to fit into a Medicaid eligibility group that's allowed by the state.  And one of the most common Medicaid eligibility groups that's available in the majority of states is this SSI group.  And with that group, a person who is eligible for SSI automatically gets Medicaid.  It's pretty cool actually.  They kind of come together.
Now there are a handful of stales that don't just automatically give Medicaid to someone who has SSI, like Virginia.  That's an example.  Usually there's just one or two rules additional or different rules that a person has to meet, a person with SSI has to meet to get Medicaid.  So even in those states where Medicaid isn't automatic with SSI, most people who have SSI are going to be eligible for Medicaid.
Now, for this webinar, we're going to be sharing information about reporting for people who get Medicaid because they have SSI.  So what happens is really by reporting to social security in most states, if you have SSI, you're taking care of reporting for Medicaid.  It is good to just confirm with your Medicaid agency if they require any extra reporting, but since there are so many differences from state to state, I can't speak to all of them, but we'll say that generally speaking when you're reporting to social security for SSI in the majority of states, at least 34, you're ‑‑ 34 states, you're also taking care of reporting for your Medicaid.  I do again just want to say good to talk with a benefit planner in your state so they can give you your state specific rules around Medicaid including reporting for Medicaid.  Okay.
What I'd like to do one just little final slide on sort of the what is SSI and Medicaid piece and I just want to give an example of someone who is receiving SSI and Medicaid to make this all a bit more concrete.  And then I'll continue to come back to this example as we go through the webinar.
Okay.  So our example person is Chen.  She's 28 years old and lives in Maryland.  She experiences blindness and she recently completed her bachelor's degree in accounting.  She had an unpaid internship last year, but that's been her only work experience.  So she doesn't have any income other than SSI right now.  And she has $1200 in countable resources, which is the balance in her checking account.  So her only resource is her bank account.  So she receives $914 per month of SSI and she gets Medicaid because of it.  So she lives in one of those states where she automatically gets Medicaid.  So you can see from this example that Chen meets all three of those SSI eligibility rules.  She was found to meet the (inaudible) and blindness.  Her resources are below $2,000.  Her only resource is her bank account and it's got $1200 in it, which is below the limit.  And she has no income.  So her countable income is clearly below the maximum SSI amount was $914.  And since she has no income, that means she is eligible to receive $914 of SSI, the maximum amount.
Lastly, because she is eligible for SSI, and she lives in Maryland, she automatically gets Medicaid.  Okay.  So hopefully what we have done at this point is we brought the rules and your understanding about SSI to the front of your brain as well as the Medicade that comes with it.  And so now what I want to did is shift us to ‑‑ want to do is shift us to the focus of our webinar which is about reporting self‑employ activity for the sake of the SSI benefit.  We will pause and check to see as it relates to all the details about what is SSI and medicate.  Are there any questions that have come in?  Ciara, do we have any questions that have come in related to SSI and eligibility Medicaid?
>> CIARA LADROMA:  It's Ciara speaking.  We do have one question and it's from Doris.  And it reads, I'm planning on started a business some time next year.  I'm thinking about applying for pass.  Do I have to apply for rehabilitation services before applying for PAS?
>> MOLLY SULLIVAN:  Great question.  So, um, first, Doris, what I would say is it's great you're exploring all of your options for getting help starting your business.  Kudos to you.  I encourage you to check out the webinar, we have the recorded webinar and pass.  If you want more explanation about that work incentive and the other ‑‑ so to answer your question, no.  Social security plan to achieve self‑support work incentive, it doesn't require that you be working with vocational rehabilitation in your state.  The folks who make decisions about the PAS application, they want to make sure that your work goal is a good fit for you and when vocational rehabilitation is involved, they can sort of defer to the VR agencies decision that it's a good goal for you.  You'll need to provide some additional information to explain to them why the business idea is a good fit for you.  So I would say you should be prepared to give a bit of an explanation about why it is a good fit for you.  And then the only other thing I would say to you is that social security planned to have self‑support, the PAS, the people who make the decision to approve or deny that, they do like to see that you found and that you have researched and looked for other funding.  If you do have other funding, they like that.  They would like to see you're not relying on just one entity.  It's not a requirement.  So if there's reasons why you haven't pursued that, you just ‑‑ I would just say be prepared to give them an explanation as to why not.  I've worked with a number of people over the years who have used PAS.  So it's definitely not a requirement.  
>> Thank you.
>> MOLLY SULLIVAN:  Absolutely.  It's a great question.  Okay.  So I'm going to move us on in what to report.  So on slide 11, I have ‑‑ I actually have for you a list of kind of the key things and I've broken it into two chunks.  So I've got a list of things that you would recommend when you first open the business.  And then I've got a list of things that you would report on an ongoing basis.  So what I'd like to do is just give you a quick overview of the list right now and then what we'll do on the following slides is I'm going to dig in to each of them.  So we'll kind of tackle them one at a time.  So each one of those ‑‑ some of them are pretty straight forward and some of them have a little bit more meat and detail to them.  I do want to clarify that when ‑‑ I'll just start at the top.
So when a person receiving SSI opens there are business, they do need to contact social security and share a brief description of that business so social security understands what this entity is what they're doing.  Also it's important to report at that time the projected net earnings from self‑employment specifically for that first year in the business.  And then also a list of business assets.  Now, in regard to the business opening and what I mean by that, I want to point out that there's no ‑‑ and I get this question often.  There's no specific date in social security's rules that defines when the business opens.  Generally for social security purposes, they want to know when the business, the operations that it was set up to do so if we take our example of Chen, who recently got her accounting degree and so let's say she's decided to become a self‑employed accountant.  So after this scenario, say after several months of business planning and opening her business bank account and all of the started activities, she's finally ready to kind of put herself out there and start marketing her services and working with clients.  So in that situation when she begins marketing her services and that's often the start of the business because that's when she's first engaging in that self‑employment activity.  She's done with the whole planning phase.  Now the self‑employment activity is beginning.  Now if you or someone that you support isn't really sure when their business is considered to be open or not, I would just say reach out to, if you can get in touch with your social security claims rep, the person claims representative, the person that social security that manages your benefits, oversees your claim so to say and you ask just kind of explain what you think the opening day is for your business and why and make sure they're on the same page with you or see if they have a different interpretation.  Since there isn't a definition anywhere and the rules is a little ‑‑ it can be a little vague.  If you have some logic for when you think the business should be considered open, then you can let them know and then you'll know.
So on an ongoing basis, let's look at the second chunk on the slide.  On an ongoing basis, when you're self‑employed, someone receiving SSI and self‑employed, then you should be reporting a couple things in terms of income, you should be reporting update financial projections.  If your estimates ended up being too high or too low, and the second thing is you should report a business tax return.  Submit a copy of your business tax return to social security when you complete it each year.  So usually you're doing that before April 15th.  So when you get that completed, you would give a copy to social security.  And lastly, if in your business you require new assets, then you're going to want to report new business assets to social security.  We'll talk a little bit more about that.  Your social security may tell you just keep a list and when we do our review, we'll ask for the updated list and local office and claims representatives may want you to report as you get new assets.  There's variation on how to handle it.  But the key is you need to be prepared and proactive about keeping a business on your updated list and sharing that social security.
So when initially reporting the business to social security, you're going to want to be prepared to share just some basic information about the business.  Sort of imagine as a comparison if you were wage employed when you contact social security, they want to know some details about the job.  So similar kind of thing happens when you're self‑employed and you report that you started.  You got a business that's opened.  Social security wants to know a few details about the business.  Right?  So the things listed in their rules they have indicated they will want to know a little bit about is first of all the name of the business and then the second is just a brief description of what the business does.  What are the services you provide, what are the product you sell?  Just a little bit of what the nature of this business is.  It's helpful to share the business structure.  Did you decide to be a sole proprietorship?  Are you a partnership?  Do you have a limited liability company?  It's helpful to give them some details about that and if there are any co‑owners, you want to give them a little bit of information about that.  In particular, it's helpful to share if you have co‑owners how you're splitting the profits of the business.  So you don't need to give some huge long business plan to social security.  It's not what you need to do.  It's really just a few key details that they need.
So how do you report this information?  The reality is there's no specific form.  There's no SSA form XYZ that you fill out with these details.  So there's a couple different ways you request can go about it.  You can call the local social security office or the toll free number, the national toll free number that when it is 800‑772‑2123.  You can just verbally report to them, tell them I started my business and they should ask you for some of those details.  So that's one way.
Another way is you can go to your local office and tell them when you're there.  Say I'm here to say and report that I'm in business and person behind the glass will likely ask some questions about the business.
Another option that you could do if you want to have something in writing that you submitted, you could put details about the business, a description of the business on that SSA form 795.  And that SSA form 795 is really like an official blank piece of paper.  The 795 literally has just a place for your name and your social security number at the top and then it's a big blank space on the page.  Huge blank space for you to write whatever you want.  And then on the next page, there's a place for you to put your name and your contact information.  So if you want a more officially record and report that you've started the business, you can put it on that 795, if you wanted.  Ultimately the key here is just to communicate to social security.  I started this business and I'm expecting to start having some money coming in.
Okay.  So that is about reporting the description of the business.  I'm going to take us to the next topic and then I'll check in for questions.  So the second item you want to be prepared to report to social security when you become self‑employed is your projected or estimated ‑‑ you can use either of those words.  Your projected or estimated net earnings from self‑employment and I'm going to call that NESE.  So you're going to be reporting your projected or estimated any NESE to social security when you open your business.  So what is NESE?  So NESE is the owners self‑employment earnings.  You will project from earnings from your business.  Remember SSI is a financial need base benefit.  So social security needs to know what kind of income are you going to get from this business.  So they want you to give an estimate of what you think.  There is an entire webinar on this topic of NESE.  So I'm just going to give a very brief recap of it right here.  If you want more, just know there's like a full hour webinar on this topic that you can check out.  For the sake of a recap, NESE is, um, basically the profits of the business less a small little deduction.  We take off a little deduction from that net profit.  And it's really just a simple two‑step calculation.  Simple two steps.  The first step to determine NESE is to take the business revenue, subtract business expenses and we get net profit.  So let's take our scenario person Chen and let's say that she's starting her business and she's expecting that she's going to have $36,000 in payments from her customers this year.  That's her business revenue, her programmed business revenue.  And she's also expecting ‑‑ she's going to have about $12,000 in business expenses, things like software and marketing expenses and business insurance and licensing fees.  She estimates all of that is going to be $12,000.  That leaves $24,000 of net profit.  That's how much her business she's planning for her business to make.  That's step 1.
Step 2, we take that net profit and we multiply it by .9235.  The reason that we do that is because it's meant to even the playing field a bit with people who are wage employed.  People who are wage employed, they only have to pay 7.65% in social security tax and then their employer pays another 7.65% on their behalf.  When you're self‑employed, you paid both the 7.75% you would normally pay as a worker, plus you have to pay the 7.65% in social security tax that the employer would pay.  So you pay extra tax, social security tax.  You're paying for the portion that an employer would normally pay for.  That's what happens when you're self‑employed.  So this second step in the NESE calculation is meant to account for the fact that really your net profit it might be $24,000, but you have to give, you have to pay 7.65% of that extra in social security tax compared to a wage employed person.  So they let you take that as a deduction.  So multiplying net profit by 9235.  Just know that the second step in the NESE calculation has a little deduction.  All of that is to say our scenario person Chen ends up with $22,164 in projected or estimated NESE for the year.  Now, in the world of social security, they're going to take that annual NESE and divide it by 12 to come up with the monthly amount.  So they would say it with looks like your estimated monthly NESE is $1,847.  Our focus is on reporting.  So I'm not going to go into the nuances of how that affects the benefits.  We have net earnings from self‑employment and SSI and Medicaid.  I encourage you to check that out.  You can also see examples of the SSI calculation and how earnings affect the SSI calculation by going to that web page.  Ciara posted a link to it.  It sending SSI income web page and maybe Ciara, if you can post it again, that would be great.  So I'm going to keep us focused on just the reporting piece of this process.  Okay?
So given that SSI benefit is going to be affected by the person's NESE that they report, their projected NESE that they report.  Let's talk about how you do that reporting of the projected NESE to social security.  Move on to that next slide.
All right.  So when an SSI beneficiary opens their business, as I have established, social security needs them to report their estimated, their projected NESE they will have for the year.  Now what happens when making that report is that social security is going to use that projection as an estimate and then they're going to pop it in the person's account.  So social security will say okay.  You're estimated to have an estimated $1,847 earnings.  They will pop that as know estimate and they will adjust it based on that.  Then at beginning of the next year, when Chen does her tax huge she will have her official final net earnings from self‑employment that she can report to social security.  So the beginning of the following year when she submits that tax return to social security, they will reconcile the payments they gave her the previous year.  So what I mean by that is they'll look at the tax return and say okay, Chen.  It looks like you ended up with ‑‑ I'm going to say 10,000 more in net earnings from self‑employment than you expected.  It means we paid you too much SSI.  So that can result in an overpayment.  Or it could be when they get the tax return, they see that Chen's net earnings from self‑employment were 10,000 less than she projected.  And if her earnings were less than she projected, that means social security owes Chen some SSI.  And they calculate and say we owe you to reconcile for last year.
So as you can see what is super important here is, um, getting a good as you can on projected or estimated NESE is going to be.  We don't have a crystal ball.  We don't ‑‑ there's no way for us to know for sure.  It's going to be a guess no matter what.  The goal is for you to be making an educated guess.  So rather than just saying this is what I want to be making in profit for this year.  Ideally, what you will do is put some thought into what you think your net earnings from self‑employment will be this year.  And so that means taking some time to make a list of what you expect or what's realistic for business revenue.  And what you expect your expenses will be for your business to make that revenue happen.
Now, if you're someone who's writing a business plan, naturally you're going to be doing that as part of the business plan.  That's awesome.  That's great.  You can take the numbers you have in your business plan and share that with social security.  Some people are not doing a business plan.  Maybe they just have a very simple self‑employment activity they will do and a business plan feels overkill.  That's the case.  It's still important that you pause and you think a bit about what would my business revenue likely be.  What's realistic for me to do given the amount I could work, given what I could pay given this work and given the number of customers that I think I can get.  So you want to put some thought into it rather than just giving a random guess.  And so I want you to know that when you do report, really this is a heads up.  That when you do report to social security that you're opening your business.  I want you to be prepared for them to say or I should say to ask you and how much do you project to have in profit this year.  What do you expect your net earnings for self‑employment to be?  Think a little bit ahead of time before you report that you started your business so that you're prepared to give a number that's an educated guess.  How you report the information is ‑‑ again there's no specific form.  So really ideally what you're doing is you're contacting social security when you first open the business and you're saying, hey, I'm opening this business and here's the description of it.  And here's what I'm expecting for projected profits over the course of the year.  So if you're calling them, just be prepared to share that detail.  If you're going in, be prepared to share that detail.  If you're using that blank official form, the 795, write it on there.  So that's really the ideal time to be prepared to share that detail.  This process of projecting, giving a projected or estimated net earnings from self‑employment to social security can feel anxiety producing.  In part because the SSI benefit will be adjusted because of T. ultimately, it will be reconciled when you do your final tax return.  But in the meantime, you want to be getting an SSI benefit that's as close to reality to what you're really making.  So I want you to know that it is absolutely possible to revise your projection once you have given it to social security.  You can recontact them and say whoa.  Things aren't going as planned.  So let's pop to the next slide and I want to check in about that and then we'll talk about ‑‑ I'll check for questions.
Okay.  So now that you're learned that social security ‑‑ you've learned that social security has a check based on the estimated projected NESE, the first and key detail I want to communicate is the importance of tracking and monitoring monthly revenue and expenses.  So, so, so important.  It's so important for so many reasons.  Not only is it important to track those details for the sake of, um, knowing whether ‑‑ how much money you're actually making, but it is also important to have those details so that you can do your taxes the end of the year.  So you can report to benefit agencies.  So really important.  It's important for just running your business and managing your business.  Knowing if you're doing okay, if the business is going all right.  Come up with a system for tracking essentially your net profit is you're tracking your business revenue and business expenses.  In addition to tracking if, it is really good to then pause every so often and compare what you're actually getting in net profit to what you projected.  Now that's good to do each month, but at the very least, you'd want to be doing that at least once a quarter.  Really ideal to be doing that at least once a quarter.  If you find that your projections are way off, then contact social security and let them know.  Say whoa, you know, like in Chen's example, I had projected to make all of this business revenue and it's just not coming N. I'm not getting the customers as quickly as I expected.  Or they're not giving me as much work as I expected or I have more expenses than I had expected.  And it could be the reverse.  It could be you opened and holy smokes, business is going gang busters and you're making way more than you thought.  And so you want to adjust it to make sure you don't end up in an over payment.  You contact them and say hey, business is going great.  I have to revise my projections.  I'm projecting much higher.
So the key to revising, giving a revised projection is tracking what's happening and monitoring it.  And then once you've done that and you compare it, at least a quarter, once a quarter to what's going on, if it's really off, then you would want to contact social security.  And you can contact them using the same methods I explained on the previous slides.  You can call.  You can go in.  You can write something up and mail it in.
Okay.  So I'm going to pause and, Ciara, are there any questions in the chatbox?  Anything reporting projected financials or revising them?
>> CIARA LADROMA:  Molly, this is Ciara speaking.  We don't have any questions right now.  So we are good to keep going.
>> MOLLY SULLIVAN:  Great.  Fantastic.  Okay.  Well, I'm going to move us on to the third and final key detail to report when the business first opens.  So this final detail is about reporting business assets.  And the reason this is important is because as you remember, SSI is a financial‑need base benefit and they take into account what you have in resources.  They count the number of resources you have and your resources need to be below the resource limit.  But they do have a resource exclusion for people who have a trade or a business.  So social security will exclude assets that you have in a trade or business if you're currently using them.  But the only way they know to do that is if you give them a list of what your assets are that you're using in your business and share that with them so they know.  So when it comes to reporting that you have opened your business, generally speaking, you will have a business bank account.  I mean, you should have a business bank account.  Highly recommended for multiple reasons, but it is really good to have a designated business bank account where you deposit your business revenue and you pay your business expenses out of it.  And so that business bank account is eventually going to have more money in it as you're business grows ‑‑ your business grows.  So you want to communicate to social security, hey, I opened this business and I have this business bang account.  And they can exclude it under property and self‑support if it is in use for your business.  You do want to make a list of any business assets you have including a description of how they're being used in the business.  That property is essential to self‑support rule and exclude business assets.  You have to have the assets and they have to be in current use.  That means you used them in the last 12 months.  It's pretty ‑‑ it's pretty generous in terms of the definition, but social security needs to understand how it is being used.  So be prepared to give a list.  How do you report the business assets?  Really you can do it with a description of the business and the estimated NESE.  You can call and be ready to say what the assets are, verbally communicate it.  You can go into the local office and explain there what your business assets are.  Or you could include them on the written if you want to use a written document with the details.  You can include that list of assets on there as well.  So really you would be reporting just like you do the others.
So that's it for business assets and how you report when you open your business.  And we do have a whole separate webinar around business resources and related exclusions.  I'm not going to go into the weeds of that here.  The focus is more on related reporting.
Okay.  So now I'm going to move us to the ongoing reporting.  So there are three core ongoing reporting activities for SSI.  The first one we already talked about, come is great and that is revising projected.  With SSI, what tends to happen is you report your projected NESE when you first report your business is open.  And then at the beginning of next year, you provide your scheduled Z or scheduled Se.  You provide your business tax return.  And when you do that, social security will likely say okay.  Well, we're going to assume whatever you made last year ask what you will make this year.  So they'll assume whatever your actual NESE was for last year will be your NESE for next year.  You need to be prepared to let them know if you expect your NESE to be different.  If you do, that's fine.  That's great.  It's just a matter of communicating it.  Right?  But for you to even do that, you also then ‑‑ you want to put a little bit of thought into what you expect in the next year.  Do you expect your business to do more in revenue?  Do you expect expenses to be the same or less?  What does that mean for your expected NESE?  It is really helpful at the beginning of each year to do a little bit of planning for your business.  Arguably, that's good to do anyway.  Right?  You want to start the new year with some thoughts on how you want to do and grow.  It is extra helpful so that you have a good projected NESE to give social security if it's going to change.  Okay?
It's also good to be prepared to provide a revised list of business assets so it's not uncommon for a person in business to acquire more business assets or to not have as many and sell business assets.  Jut be prepared to give an updated list to social security as things change.  Your SSI claims rep may want you to report at those changes as they occur.  Some of them just.  You to report when they do a redetermination.  I would recommend you always keep just a running list of your assets.  When you have gotten rid of them or new ones, put some dates around them and then a brief description of how you have used them.
And then lastly, I have already alluded to this.  So important that you do your business tax return and then you submit a copy to social security.  They use that business tax return to serve as your sort of official, final NESE.  And they then take that number and reconcile the previous year to figure out if they paid you too little or too much.  So how do you submit your business tax return?  For this one, you do actually have to get that tax return to your local office.  So you're either going to be mailing it in or bringing it in to the local office.  Yeah.  And in terms of reporting changes in any NESE or business assets, you can communicate that by phone, in person or by mail, whichever works best for you from your experience with your local office.
All right.  I have some tips I want to share, but before I do that ‑‑ let me share some tips and then I will open up it for some final questions.  Let's do it that way.  So really the tips I got on slide 18 are a summary of everything that I shared and they all support making those reporting activities happen.  So the first tip is to put a little time and thought into what you expect your projected NESE to be.  And that means taking some time to think about what's realistic for you around business revenue and taking some time to estimate what kind of business expenses you all have, how much they'll likely be.  Again, there's no crystal ball or no way to know for sure, but you at least want to be making an educated guess around your projected NESE rather than just a random guess or a guess of what you wish.  You really want to be making an educated guess.
The second tip is to record each month, each month record your business revenue and your business expenses.  Come up with whatever system works best for you.  There's also different ways to record and keep track of your business activity, financial activity.  Some people it might be pen and paper.  Some people it might be an Excel spreadsheet.  Some people may use Quickbooks or some type of accounting software.  And some people may have a bookkeeper.  It can look different with every person.  You may be doing it on your own.  You may have somebody to support you.  It's really a very personal decision as to how you're going to go about tracking your revenue and expenses.  The key is to come up with that plan and use it.  So that's the second tip.
And the third is to then at least once a quarter compare your actual net earnings from self‑employment to your projected to see if there's a difference that's going to there.  And if there is something substantial, to then communicate that to social security so that they can adjust the amount of SSI you're getting so you don't end up with too big.  The third tip is to then also create a little time when you are first starting your business to create a was assets.  And at first what's true with most businesses is it's small.  You are opening with a business bank account.  But then take that list and update it as things evolve and change in your business so have a running list of what the business assets are and how they're being used on your business.
And lastly, the final tip is to then do a business tax return each year and submit a copy of that to social security.  We talked about that quite a knit to social security.  I'll leave it at that.  Those are core tips that I would suggest.  And so on that note, Ciara, if there are any questions in the chatbox, I would love to address them before I turn it over to the NDI team.
>> CIARA LADROMA:  Hey, there Molly.  This is Ciara speaking.  We have one question that came through and it asks:  Does the state tax vary from state to state?
>> MOLLY SULLIVAN:  Great question.  So what's true with different taxes.  So I guessed tax being referred to is a federal tax like the social security tax, that doesn't change from state to state.  But there can definitely be business taxes that vary from state to state and even business taxes that vary from city to city within a state.  Taxes get ‑‑ can get very weedy.  So there can be variation from state to state around the taxes that you owe for sure.  Really important to a part of taking care of any tax responsibilities to consult with a CPA, a certified public accountant, a tax advisor as you move forward.  It's really a helpful, helpful thing to get done especially in the beginning to get a good solid start on your business.
>> CIARA LADROMA:  Thank you.  I have one more question.
>> MOLLY SULLIVAN:  Yeah.
>> CIARA LADROMA:  Sorry.  This is Ciara speaking.  Do you have any resources or any information on just dealing with NESE stuff with Medicaid only?
>> MOLLY SULLIVAN:  Um, what's a little tricky about that is Medicaid is different from state to state.  I think my ‑‑ my ‑‑ my two sense would be to keep a really good record of what your business expenses are and what your business revenue is so that you have the reality of what your NESE is.  How your state ‑‑ it's going to be different from state to state.  I think aside from keeping a good solid record, my other two sense would be if you can get connected with a benefit planner to help you understand your state's Medicaid rules around NESE.  Every state Medicaid has policies, not all the policy manuals are online, but they all have policies about income and resources.  And so it could be helpful to talk with a benefit planner to see if they could help you better understand what the rules are.  So you're all playing from the same rule book when it comes to reporting your NESE.  In the case that it isn't based on your SSI.  I hope that was helpful.  Tricky when it's a state‑specific thing.  Ciara, are there any questions or follow‑up questions for that?
>> CIARA LADROMA:  This is Ciara speaking.  No, we're good.  Thank you.
>> MOLLY SULLIVAN:  Great.so appreciate everybody's questions and your time today.  I hope you picked up some tips or helpful information.  So with that, I would like to turn it over to Caroline with the NDI team to share upcoming events.
>> CAROLINE BOLAS:  Thank you, Molly.  I think the way you do it bit by bit gives a great overview and practical tips of how to take it forward.  If you're here and thinking this is all great stuff, but I also get SSDI or Medicare, I think we need to think about it, but we have this section for you.  This is taking place Wednesday October the 18th, 2:00 to 3:30 eastern time.  And Molly will be back sharing similar information, but how it relates to SSDI and Medicare.
One thing we really wanted to share with you today is we have open registration for disability owned business convening which is taking place on October the 31st, November the 2nd and November the 1st.  I think those dates are not 100% correct.  It is Tuesday October 31st, Wednesday ‑‑ sorry.  Wednesday the 1st of November and ‑‑ it is 12:30 to 5:00 p.m. eastern time.  It's going to be an amazing event.  We have entrepreneurs with disabilities who are going to be sharing their business stories and share how they were able to start and grow their business.  We will have panels on how to access capital and really examples of that.  There will be breakout sessions and covering things like negotiation skills and entrepreneurs and how to do a compelling pitch, how to get DOBE certification and make sure you understand your numbers.  So picking out what Molly was saying in terms of projections.  Really understanding your numbers.  So we're aiming it at whoever does this.  Support entrepreneurs, familiar institutions, really anybody who has an interest in making sure entrepreneurs with disabilities with really success and get their businesses up and running.
And then I'm sure Lexi put a link to the registration in the chat and we'll also send out more information in the weeks to come.
We also have another one webinar coming from Griffin‑Hammis Associates.  That's around looking around when you're thinking about starting your business, how can I do that?  It is not one sort, but people blend.  So we'll have an entrepreneur sharing their experiences about how they use a blend of funding to start and grow their business.
So maybe you're here today and ready to start your interest in thinking gosh, I got a business idea or maybe you already have a business, but I would love to get some help to make it be more successful than it is.  So we have a number of resources at our website, which is WWW.disabilitysmallbusiness.org.  And there you will find as we said past webinars, information about future webinars.  We can also offer support through community navigator and you can contact her.  We're currently just started a financial health learning community that covers many different things that Molly was touching on today in terms of how do you project your cash flow, your profit and potential loss and taxes, how to make sure we are paying taxes correctly.  Although we have just started it, we do have a wait list.  If you're interested in applying, please complete the application form or e‑mail me Caroline Bolas.  We want to share a couple more resources.  We do have a streaming TV channel.  You can get it on Roku or Amazon Fire.  You can says it by the website which is WWW.disabilityown.com and there you will find a whole host of content.  But particularly, there are some entrepreneurs who are sharing again their experiences in a special program that really allows you to in depth learn how businesses have come to be started and then really grow and succeed.  We have a lot of webinars, you are subject to do your own self‑paced learning and a great resource is through the Verizon small business ready program.  This is again free and it provides self‑paced modules.  Also mentoring, ask the experts where you can talk and ask questions to experts in live sessions.  They do have grant opportunities on a regular basis.  So that's a great program to great resources too.  And then hopefully you already on the mailing list because you are here today.  If you're not, please do join.  You will get a monthly newsletter and other updates about key information for entrepreneurs across as we move forward.  So that would be great.
Lastly, we want to introduce you so you know who we all are.  As I said, I'm Caroline Bolas.  Ruth Chavez is our community communicator.  We are led by Nikki Powell with LS.  And back stage is Lexi Jones.  We are all here to help as much as we can and look forward to Connect with you.  With that, I would like to thank you all for taking the time.  The webinar will be posted on the website in 1 to 2 weeks and we thank you all.  We hope you have a great rest of your day.  Thank you.
>> MOLLY SULLIVAN:  Thanks, Caroline.  Thanks, everybody, for joining.  Take good care.  Bye.