Best way to file
In order for me to not compromise any benefits such as SSDI, SSI, Medicaid, EBT, Section 8, etc, would it be best to file as a Nonprofit, LLC or Inc.?
Quick Answer:
From a tax and legal perspective, the choice of entity (Nonprofit, LLC, or Inc.) does not automatically protect your government benefits. Most programs like SSI, Medicaid, and SNAP (EBT) have strict **income and resource limits**.
1. **Nonprofit:** Being a founder or board member doesn't inherently count as income, but any salary or stipend paid to you is earned income. Furthermore, you do not "own" a nonprofit; the assets belong to the public/mission.
2. **LLC:** If you are the sole member, the IRS treats this as a "disregarded entity." All business profit is treated as your personal income (Schedule C), regardless of whether you keep the money in the business bank account. This will likely impact asset and income tests for benefits.
3. **Inc. (C-Corp):** This creates a separate tax entity. However, if you perform work for the corporation, you are generally required to pay yourself a "reasonable salary," which counts as income.
**Crucial Note:** Asset limits for SSI and Medicaid are very low (often $2,000 for individuals). Business equipment and equity may be counted as resources depending on your state’s rules.
I am unsure of your specific state's "Plan to Achieve Self-Support" (PASS) rules, which may allow you to set aside income for a business without losing benefits. You should consult a benefits counselor or disability attorney.
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
