Income Calculations

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One of the biggest challenges for owners and managers when it comes to calculating rent for HUD-assisted sites is determining the appropriate medical deduction for eligible households. Every household spends some of its income on health-related expenses, but not all households and not all expenses qualify to be deducted. We’ll go over HUD rules regarding the medical expense deduction. We’ll discuss whose medical expenses may be deducted, along with what types of costs are also considered eligible.

As of July 1, the standard mileage rate used to deduct eligible business trips in a vehicle on tax returns increased by 4 cents, to 62.5 cents per mile. And the new rate for mileage to and from medical treatment for residents is 22 cents. These new rates apply to trips during the second half of 2022.

On April 18, HUD issued the fiscal year 2022 income limits that determine eligibility for various HUD-assisted housing programs including the Public Housing, Section 8 Project-Based, Section 8 Housing Choice Voucher, Section 202 Housing for the Elderly, and Section 811 Housing for Persons with Disabilities programs. The income limits became effective immediately and can be found at https://www.huduser.gov/portal/datasets/il.html.

On Dec. 17, 2021, the IRS issued Notice 22-03, which contains the 2022 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. The agency said it rates the standard mileage for business use based on an annual study of the fixed and variable costs of operation. According to the IRS, standard mileage rates are up slightly from 2021 in two categories.

On Oct. 13, the Social Security Administration (SSA) announced that the Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 5.9 percent in 2022. This is the largest increase in 40 years.

HUD’s Office of Multifamily Housing Programs recently issued guidance regarding the treatment of unemployment benefits under the 2021 Consolidated Appropriations Act and the monthly child tax credit under the American Rescue Plan of 2021 (ARPA).

HUD’s Office of Public and Indian Housing (PIH) and HUD’s Office of Community Planning and Development (CPD) recently clarified that public housing agencies (PHAs) and the Housing Opportunities for Persons with AIDS (HOPWA) program will exclude the $400 per week unemployment benefit enabled by the presidential memorandum signed by President Trump in early August. In a clarification emailed to a PIH listserv, HUD’s PIH has stated that FEMA assistance doesn’t usually count as income. CPD announced this through a HUD Exchange email on Oct. 26.

The Social Security Administration recently announced that the Social Security and Supplemental Security Income (SSI) benefits will increase 1.3 percent in 2021. The 1.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Increased payments to more than 8 million SSI beneficiaries will begin on Dec. 31, 2020. Changes to Medicare for 2021 have not yet been announced. When information is available, it will be provided at www.Medicare.gov.

Since the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted in March, millions of unemployed workers have claimed unemployment benefits that were more generous than they normally would’ve received, including those who would’ve received no benefits at all. The CARES Act’s boost in benefit levels expired on July 31 and its eligibility expansions and additional weeks of benefits will expire on Dec. 31.

Senior citizens who apply to or already live at your site may have income from certain types of retirement plans. The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for a temporary waiver of required minimum distributions (RMDs) that would otherwise be payable in 2020 for IRC Section 403(a) and 403(b) defined contribution plans, governmental IRC Section 457(b) defined contribution plans, and individual retirement plans.