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Unincurred Business Expense

When the Social Security Administration refers to unincurred business expenses, they are referring to self-employment business support that has been provided to you at no cost. When deciding whether or not you are engaging in Substantial Gainful Activity (SGA), the SSA will deduct unincurred business expenses from your net earnings that you receive from self-employment.

Examples of unincurred business expenses include items or services provided to you by a vocational rehabilitation center or family members or friends who provide you with unpaid business help.

In order for an item or service to qualify as an unincurred business expense, you must have received it at someone else’s expense and it must be an item or service that the IRS would allow as a legitimate business expense. One way to tell whether or not an item or service is an unincurred business expense is to see if the IRS will not allow you to deduct the cost for income tax purposes because someone gave you the item or service at no cost.

For SSI (Supplemental Security Income) purposes, the SSA does not deduct the unincurred business expenses from your earnings when they are calculating your SSI payment amount.