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Guide for Completing Form 8823 - page 39 / 197





39 / 197

income, or income fluctuates, income may be determined based on actual income received or earned within the last twelve months before the determination.18*

Income includes, but is not limited to, earned and unearned income from all household members age 18 and older (adults, *including foster adults19*), unearned income of minor children *and foster children20 under the age of 18*, and income from assets. Emancipated minors, *persons under the age of 18 who have entered into a lease under state law,* are treated as adults.

*The treatment of a student’s income is dependent on the age of the student, the type of income, and the status of the student within the household. It doesn’t matter whether the student is living with the household or is away at school.

  • 1.

    If the full-time student is 18 years of age or older and is the head of the family, spouse or co-head, all income is included.

  • 2.

    If the full-time student is 18 years of age or older and a dependent, only the lesser of actual earned income or $480 is included, along with unearned income and income from assets.


If the full-time student is a minor (under the age of 18), then only unearned income and income from assets is included. No income from employment is counted.

The treatment of educational scholarships and grants is discussed later in this chapter.*

As noted in chapter 5 of HUD Handbook 4350.3, “In all instances, owners are expected to make a reasonable judgment as to the most reliable approach to estimating what the tenant will receive during the year.”21

Common sources of income are discussed below. Refer to HUD Handbook 4350.3, *Chapter 5,* for additional information.

Employment Income

Employment income includes (but is not limited to) hourly wages, salaries, overtime pay, tips, bonuses, and commissions before any payroll deductions. Payments in lieu of employment income are also included; e.g., workers compensation, severance pay, unemployment and disability compensation. *Earned* income from employment of children (including foster children) is excluded.

Maximum benefits and annualized payments should not be used unless the source of funds is expected to continue throughout the certification period or for an indeterminable length of time. For example, if the third party does not indicate the length of time for which the tenant will be receiving a certain income, then the income should be annualized. In the event that the family cannot provide documentation that access to a specific source of income is for a limited and determinable time period, the benefits should be considered to be available for an indefinite time period and annualized.

18 19 20 21 Effective August 1, 2009. The HUD Handbook 4350.3, Chapter 5, paragraph 5-5(C). *74 FR 4841-4842, regulatory changes to 24 CFR 5.609.* Effective August 1, 2009.


Revised October 2009

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