1. Michael Kotin, CPA Kay-Kay Realty Corp. NCSHA Atlanta, 2017
Unearned Income
Michael Kotin, CPA
Kay-Kay Realty Corp.
NCSHA Atlanta, 2017

2. Unearned income
For LIHTC qualification purposes, income is defined by the HUD manual.
Income is not determined based upon whether the monies received are taxable for IRS purposes.
Many non-taxable sources must still be included in the computation of household income for LIHTC purposes.

3. Gifts
Generally recurring gifts must be included in the computation of household income for LIHTC purposes.
This provision includes “indirect” and “in kind” gifts.
Daddy paying the bank for your car payment for you would be an indirect gift. Daddy refilling your MobileGas card every month would be an in-kind gift.

4. Gifts However, some specific types of gifts are excluded: Food
Medicine
Daycare paid direct to provider
Rent assistance paid by HUD (Section 8)
Food stamps

5. SOCIAL SECURITY
Generally all forms of Social Security (SSA, SSD & SSI) are included in the computation of household income for LIHTC purposes.
This provision includes Social Security benefits paid to household members on behalf of dependent minors.

6. SOCIAL SECURITY
The gross SSA benefit is counted, not the net benefit sent to the household member after deduction of Medicaid.
A recurring deduction for a previous overpayment is deducted from the calculation provided that the reduction period is verified.

7. Alimony, spousal & Child support
Alimony, spousal support and child support is counted if it is being received.
Existence of a court order is not required.
Informal payments are included even if the monies are paid outside of the any state court or monitoring agency.

8. Alimony, spousal & Child support
Alimony, spousal support and child support is NOT counted if it is not being received provided:
Tenant certifies that they have made reasonable efforts to collect.
Tenant certifies that no special understanding has been reached with the other person to circumvent inclusion for HUD purposes.

9. Other unearned income
There are other types of unearned income to consider:
Annuities
Insurance policies
Retirement funds
Pensions
Disability / death benefits
Scholarships & grants (sometimes)

10. Other unearned income
Income from assets is another type of unearned income which must be considered.
Careful not to count the underlying asset of the items which are discussed here.
Other inclusions and exclusions exist. Full list is contained in Chapter 5 of the HUD manual

11. Unearned Income Questions: Michael Kotin, CPA Kay-Kay Realty Corp.
6908 East Thomas · Suite 300
Scottsdale, AZ