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Guide for Completing Form 8823 - page 53 / 197





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such amounts to be excluded from income, the individual must provide the owner with an affidavit stating that the amounts are received on behalf of someone who does not reside with the family and that the amounts meet the conditions stated above.

  • 11.

    Interests of individual Native Americans in trust or restricted lands, and the first $2,000 per year of income received by individual Native American that is derived from a trust or restricted lands are not included in income. Amounts received under the Maine Indian Claims Settlement Act of 1980 are also excluded. In addition, all or a portion of the payments under the Alaska Native Claims Settlement Act, judgments of the Indian Claims Commission or U.S Court of Claims may be excluded from income. See HUD Handbook 4350.3 for details.

  • 12.

    Payments received after January 1, 1989 from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the Agent Orange product liability litigation are not included in income. M.D.L. No 236 (E.D.N.Y)

  • 13.

    Any Earned Income Tax Credit to the extent it exceeds the tenant’s income tax liability is not included in income. See IRC §32(j). For example, a tenant may have a tax liability of $400, and an Earned Income Credit of $700. The credit will not only eliminate that $400 tax liability, but the tenant will receive a $300 refund. The $300 is not included in income. Alternatively, the tenant may receive payments directly from his/her employer during the year. These periodic payments are not included in income.

  • 14.

    The value of any childcare provided or arranged for under the Child Care and Development Block Grant Act of 1990 (CCDBGA) (42 U.S.C. 9858q) is not included in income. Participating families may either pay a reduced amount based on a sliding fee scale or they may receive a certificate for child care services. Note that funds received through CCDBGA for providing childcare services are included in income.

Tenant Income Certification Effective Date

Once all sources of income and assets have been properly verified, owners or managers perform an income calculation using the applicant’s tenant income certification to determine whether the applicant qualifies for IRC §42 housing.

The effective date of the tenant’s income certification is the date the tenant actually moves into the unit. All adult members of the household should sign the certification. HUD Handbook 4350.3, 5-17B. If the certification is more than 120 days old, the tenant must provide a new certification. The income recertifications, *if required,* must be completed annually based on the anniversary of the effective date. 35

35 *Tenants may be subject to income certifications for other programs which define the effective date differently. The notation or use of alternative “effective dates” for purposes of triggering an annual income recertification will not disqualify an annual income recertification for IRC §42 purposes. The IRS will rely on the source documents; i.e., the signature dates on the initial income certification and subsequent income recertifications (as needed for mixed-use projects).*


Revised October 2009

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