SSR 62-64. NET EARNINGS FROM SELF-EMPLOYMENT -- PAYMENTS UNDER THE 1962 WHEAT AND FEED GRAIN PROGRAMS
- Payments made to farm operators or materially participating landlords under the 1962 wheat and feed grain programs established by the Agricultural Act of 1961, for land diverted from the production of wheat and feed grains to conservation uses are includible in computing net earnings from self-employment for social security purposes.
Advice has been requested as to the status for social security purposes of payments made for land diverted from the production of wheat or feed grains to conservation uses under the heat and feed grain programs established by the Agricultural Act of 1961 (Public Law 87-128).
The 1962 wheat and feed grain programs established by the Agricultural Act of 1961 provide, among other things, for payment for the diversion of land from the production of wheat and feed grains to conservation uses. In SSR 61-28, C.B. 1960-1961, p. 70, it was held that payments, made to a farm operator for land placed in the soil bank conservation reserve program under the Federal Soil Bank Act, were includible in computing net earnings from self-employment. The payments made under the Agricultural Act of 1961 are, for social security purposes, essentially similar to those paid under the Federal Soil Bank Act and should be treated similarly.
Accordingly, it is held, that payments made to farm operators for the diversion of land from the production of wheat and feed grains to conservation uses under the 1962 wheat and feed grain programs established by the Agricultural Act of 1961 are includible in computing net earnings from self-employment.
In some cases, a farm owner or tenant (who will be called the "landlord" for convenience) and a tenant to whom he has rented or leased land under a share-farming arrangement, may divert part of such land from the production of wheat or feed grain. In such cases, the landlord's share of any payments under these programs, like soil bank payments in such situations, is includible in computing his net earnings from self-employment only if, in accordance with an agreement with the tenant, he materially participates in the production or the management of the production of the farm commodities produced on that part of the land not so diverted. If the landlord does not so materially participate, his income under these programs is not includible in computing his net earnings from self-employment. (See SSR 61-7, C.B. 1960-1961, p. 67, for a discussion of "material participation.")
Thus, the net income received by a farm operator or a materially participating landlord under these programs may be used in determining both his eligibility for and the amount of any benefits under the old-age, survivors, and disability insurance program as well as in determining his earnings for purposes of work deductions under section 203 of the Social Security Act.