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Guide for Completing Form 8823 - page 41 / 197





41 / 197

*Military Employment*

*Because Justine is not working at the time of the certification and actual income from her sporadic employment as a typist cannot be reasonably determined, the income earned during the six-month period in the prior year should be included in the income certification.

NOTE: An owner must make a reasonable judgment. The prior year’s income should not be used to estimate Justine’s future income if she can provide sufficient documentation that her earning capabilities have changed; e.g., her contract with the temporary agency has been terminated.*

Payments received under the Domestic Volunteer Service Act of 1973 are excluded from income. This includes employment through VISTA, Retired Senior Volunteer Program, Foster Grandparents Program, youthful offender incarceration alternatives, and senior companions. Payment received under Title V of the Older Americans Act (Green Thumb, Senior Aides, Older American Community Service Employment Program) is also excluded.

Military employment may include (but is not limited to) base and longevity pay, proficiency pay, sea and foreign duty pay, hazardous duty pay, subsistence and clothing allowances. All these are includable in income. Hostile fire pay, however, is excluded from income. Note: a temporarily absent individual on active military duty must be removed from the family and his or her income must not be included in the computation of household income, unless (1) that person is the head of the family, spouse, or co-head *or (2), the spouse or a dependent of the person on active military duty resides in the unit.

*Military Basic Housing Allowance*

Military basic housing allowances are also included in income. However, under IRC §142(d)(2(B)(ii)24, military basic housing allowances are not included in household income if the low-income building is located in any county, or adjacent county, in which is located a qualified military installation. A qualified military installation is any military installation or facility to which:

  • 1.

    not less than 1,000 members of the Armed Forces are assigned, and

  • 2.

    the number of members of the Armed Forces assigned to units based out of such qualified military installation, as of June 1, 2008 has increased by not less than 20 percent, as compared to such number on December 31, 2005.

Qualifying military bases are identified in Notice 2008-79.25 The list is not meant to be exclusive and any qualified military installation which satisfies the percentage requirements of IRC §142(d)(2)(B)(iii)(1) would be eligible to receive similar treatment regardless of its failure to be included in Notice 2008-79 or any subsequent updates.

24 25 *IRC §142(d)(2)(B)(ii) was added under section 3005(a) of the Housing Assistance Tax Act of 2008.* *Notice 2008-79, 2008-40 I.R.B. 815. The IRS will update the list if it receives additional information indicating that other military installations should receive the same treatment. Owners may rely on this list for income determinations made after July 30, 2008 and before any successor list is published.*


Revised October 2009

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