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Home>Section 8 Partcipants>Information for Program Participants>How Annual Income Is Determined
HOW ANNUAL INCOME IS DETERMINED
DEFINITION OF ANNUAL INCOME
HUD defines Annual Income as all amounts, monetary or not, which: go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and which are not specifically excluded. Annual income also means amounts derived (during the 12- month period) from assets to which any member of the family has access. For HUD’s complete definition of Annual Income, including a listing of all income exclusions, see 24CFR5.609.
SPECIFIC INCOME TYPES
The following is a list of the most common income types, as well as other items that the Housing Authority documents, including details associated with how these items are verified. This is not a comprehensive list, as new income sources and other related items are added frequently. Items presented below are listed in alphabetical order.
Annual contributions / gifts: HUD requires that regular and ongoing contributions and gifts should be counted towards annual income. However, gifts or contributions that occur annually (such as Christmas or birthday gifts) are not considered regular or ongoing because they occur only once during the re-examination reporting period of one year.
Assets: For current program participants at annual reexamination the Housing Authority will collect current tenant provided documents, such as bank statements.
Child Care Expense Deductions: The Housing Authority must first verify that child care expenses are used to enable a family member to work, actively seek employment, or further his/her education. For instance, the childcare must be provided during the hours of work, education, etc. when there is no other activity (such as school) for the child.
Disability: If a tenant receives SSI, the verification of the SSI payment is acceptable verification of the disability. If the tenant does not receive SSI, verification of disability, depending on the individual’s circumstances, will be requested from a doctor, other health care professional or a social worker, with medical or professional knowledge of the person’s disability. If such verification is not available, the Authority may consider other forms of verification on a case-by-case basis.
Full Time Student Status: Full time student status must be verified using current tenant documents provided either by the household or by the school. Full time student status will be annually.
Citizenship and Immigration Status: All program participants admitted to the program must sign a statement indicating whether they are a US citizen, a legal resident, or whether they do not contend to have eligible citizenship status (and will therefore receive prorated assistance). US citizens will be asked to provide proof of citizenship, which may include either a birth certificate, passport, or naturalization certificate. Non-citizens who are under the age of 62 years old must provide documentation of eligible immigration status (which is then verified in the E-verify SAVE system).
Medical Expense and Disability Assistance Expense Deduction: To receive the medical expense deduction, tenants must complete the medical expense verification forms provided in the medical expense packet. However, if a program participant reports medical expenses in excess of $3,000, Housing Authority staff will attempt to further validate the expenses in a manner that does not violate the confidentiality of the program participant.
Seasonal Income: If a participant is employed in an occupation that is cyclical (that increases or decreases at the same time each year such as farm workers, teachers and construction workers) all income expected to be received during the year must be annualized. If the Housing Authority determines that past income is the best predictor of future income, historical data may be used to project annual income.
Self Employment: All self employed tenants and applicants will be asked to provide a complete copy of their most recent tax return (including Schedule C and Schedule SE if applicable). Additionally, all self employed tenants and applicants will be asked to complete the self employment certification form, and to sign form IRS 4506-T.
Social Security (SS) / Supplemental Security Income (SSI): The Housing Authority is required to use the HUD EIV system to obtain up-front verification of Social Security and SSI benefits for current program participants. If the amount shown on EIV does not match the amount provided on a current original benefits letter, the amount in the benefits letter will be used. If no current original benefits letter has been provided, but EIV matches the amount the tenant has reported through the Personal and Financial Statement, EIV may be used without collecting tenant documents.
Social Security Numbers: All applicants, regardless of age, must disclose a valid Social Security Number and provide the required documentation at the time of their initial eligibility determination.
Wages: The Housing Authority is required to use the HUD EIV system, along with tenant provided documentation (such as current consecutive paystubs), to obtain verification of wages.