Income & Assets: Income Inclusions & Exclusions

Next week we will be discussing income and assets and determining tenant rent. We will talk about all that earned and unearned income that must be included or excluded from calculating the tenant’s annual income. And while we will go over the more common income that tenants receive and Owner/Agents experience, there are other sources of income that will not be touched on.

So, what odd or not so common income may you come across and wonder if you should include it or not in your calculations? Such things could be:

  • Resident Stipends
  • Income from Training Programs
  • Earned Income Tax Credit refund payments

If the property has a resident that receives a stipend of less than $200 a month for minor duties around the property, such as distributing flyers, being a key holder, or perhaps even performing light cleaning duties, the stipend will not be included in the income calculations. However, if the stipend is greater than $200, it would be included in the Resident’s income calculations.

Some tenants take advantage of training programs to improve skills and/or continue their education. HUD-funded training programs are excluded from annual income. Incremental earnings and benefits received by any family member due to participation in qualifying state or local employment training programs are also excluded. If the tenant is receiving income from a training program that is not affiliated with a local government, the income is also excluded. Some additional rules regarding income from training programs are:

  • Excluded income must be received under employment training programs with clearly defined goals and objectives and for a specific limited amount of time. The initial enrollment must not exceed one year, although income earned during extensions for additional specific time periods may also be eligible for exclusion
  • Training income may be excluded only for the period during which the family member participates in the employment training program
  • Exclusions include stipends, wages, transportation or child-care payments, or reimbursements
  • Income received as compensation for employment is excluded only If the employment is a component of a job training program. Once training is completed, the employment income becomes income that is counted
  • Amounts received during the training period from sources that are unrelated to the job training program, such as welfare benefits, social security payments, or other employment, are not excluded

And finally, the Earned Income Tax Credit refund payments. Some tenants may be eligible for the earned income tax credit. If so, they may receive payments from their employer each quarter because of the tax credit. If you see such payments, they need to be excluded from their annual income calculations.

For more examples or scenarios of income inclusions and exclusions, join us next week for Wednesdays with CMS as I present “Calculations & Income & Assets, OH MY!

About the Author
Karen Ventrice, Affordable Housing Trainer

Karen currently serves as the PBCA Affordable Housing Trainer and has been an integral part of CMS for 10 years. Her experience includes roles as Resident Liaison, Contracts Specialist, Compliance Specialist, and now the PBCA Affordable Housing Trainer for CMS. Karen provides a full range of instructional design services including needs analysis, content design and creation, training observations, evaluation of content and courses, instructional consultations, and development of training interventions.

October 15, 2020In Highlights5 Minutes