LIHTC Income Eligibility Calculator
Use this calculator to estimate your household's annual income for Low-Income Housing Tax Credit (LIHTC) program eligibility. This tool provides a simplified estimate based on common LIHTC rules. Actual eligibility is determined by the specific property management and state agency guidelines.
Annual Income Sources
Deductions
The Low-Income Housing Tax Credit (LIHTC) program is the largest source of affordable housing in the United States. It provides tax incentives to developers who build or rehabilitate affordable rental housing, making these units accessible to individuals and families with limited incomes. To qualify for LIHTC housing, your household's income must fall within specific limits, which are determined by the Area Median Income (AMI) for your location and household size.
Understanding LIHTC Income Calculation
Calculating income for LIHTC eligibility is a precise process based on the HUD Part 5 definition of annual income. It's not simply your gross income; various inclusions, exclusions, and deductions are considered to arrive at an "adjusted annual income" figure. This figure is then compared to the income limits for the specific LIHTC property and your household size.
Key Components of LIHTC Annual Income
The LIHTC program aims to capture all anticipated income the household will receive during the upcoming 12-month period. Here's a breakdown:
1. Gross Income Inclusions
This includes most sources of income for all household members, regardless of age, with some exceptions for minors. Common inclusions are:
- Wages, Salaries, Tips: Gross earnings before taxes and deductions.
- Self-Employment Income: Net income from a business or profession.
- Social Security Benefits: Including retirement, disability, and survivor benefits.
- Pensions and Annuities: Regular payments from retirement accounts.
- Unemployment and Worker's Compensation: Benefits received.
- Alimony and Child Support: Payments received by the household.
- Public Assistance: Such as TANF (Temporary Assistance for Needy Families).
- Regular Gifts and Contributions: If they are recurring.
- Asset Income: Actual income derived from assets (e.g., interest, dividends, rental income from property owned by the household). If assets exceed a certain threshold (e.g., $5,000), an imputed income based on a passbook savings rate might be used, even if no actual income is generated.
2. Income Exclusions
Certain types of income are specifically excluded from the LIHTC annual income calculation:
- Income of a minor (under 18) from employment, up to a certain amount (often up to $480). However, most other income for minors is included.
- Foster care payments.
- Lump-sum additions to assets (e.g., inheritances, insurance payments, tax refunds).
- Scholarships and grants for tuition, books, and fees.
- Temporary, non-recurring income.
- Amounts received under the Earned Income Tax Credit (EITC).
- Payments from certain federal programs (e.g., some portions of GI Bill benefits).
3. Deductions
After determining the gross annual income, certain deductions are applied to arrive at the adjusted annual income:
- Dependent Deduction: A statutory deduction of $480 for each dependent under 18 years of age, or for each disabled person (who is not the head of household or spouse/co-head).
- Elderly/Disabled Household Deduction: A $400 deduction if the head of household, spouse, or sole member is elderly (62 or older) or a person with a disability. This is a household deduction, not per individual.
- Childcare Expenses: Amounts anticipated to be spent for the care of children under 13 years of age, if necessary for a household member to work or pursue higher education. This deduction cannot exceed the amount of income generated by the adult seeking care.
- Medical Expense Deduction: For households where the head, spouse, or sole member is elderly or disabled, medical expenses exceeding 3% of the total annual income can be deducted. This includes health insurance premiums, doctor visits, prescription medications, etc.
How to Use the LIHTC Income Calculator
Our simplified calculator above helps you quickly estimate your household's adjusted annual income. Simply input the requested information:
- Household Composition: Enter the number of adults, dependents, and elderly/disabled members in your household.
- Income Sources: Provide your gross annual wage income, other income sources, and any annual income generated from assets.
- Deductions: Input your annual childcare and, if applicable, medical expenses.
The calculator will then provide an estimated total gross income, total deductions, and your final estimated LIHTC Annual Income. Remember that this is a simplified tool. Property managers will conduct a thorough verification process, which includes reviewing bank statements, pay stubs, tax returns, and other financial documents.
Important Considerations
- State and Local Variations: While the HUD Part 5 definition is federal, states and individual properties may have slight variations or additional requirements.
- Asset Limits: Some LIHTC properties may also have asset limits in addition to income limits, though this is less common than income limits.
- Student Rules: There are specific rules regarding full-time students that can affect eligibility. Generally, households composed entirely of full-time students are not eligible, with some exceptions.
- Verification: All information provided for LIHTC eligibility must be verified by the property management. Misrepresentation of income or household composition can lead to denial or eviction.
This worksheet and calculator are designed as a preliminary guide. Always consult with the specific LIHTC property management or a housing counselor for accurate and personalized eligibility information.