HUD Updates List of Federally Mandated Exclusions from Income After Ten Years

Nearly ten years after its last update, the new list of Federally Mandated Exclusions from income was published in the Federal Register on January 31, 2024. The listing adds four new income exclusions and clarifies/expands four income sources that had been described previously. The most significant change is that the entry specifically details which sources of income are excluded both from income calculations and asset determinations. The listing supersedes the previous document from May 20, 2014.

The following are new income exclusions:

• Supportive services payments and reimbursements of out-of-pocket expenses as paid through the Domestic Volunteer Service Act of 1973. Additionally, the exclusion no longer applies when the CEO of the Corporation for National and Community Service determines that the payments earned by a participant are greater than or equal to the amount they could earn if paid at minimum wage.
• Any refund issued under the Internal Revenue Code. Such refunds or refundable tax credits are excluded from both income and assets for a period of 12 months following its receipt.
• The value of, distributions from, and certain contributions to ABLE (Achieving a Better Life Experience) accounts.
• Payments made under the Emergency Rental Assistance Program as provided under the Consolidated Appropriations Act of 2021.

The following represent modifications to existing federally mandated income exclusions:

• The notice amends the way income from Tribal Trust Settlements is excluded. The first $2,000 of per capita shares received under the settlement are also excluded unless the per capita payments exceed the amount of the original proceeds under the trust, and they are made from a Tribe’s private bank account into which the Tribe has deposited settlement proceeds. (Previous exclusion vii)
• The income exclusion for payments received as spina bifida benefits for service veterans now also includes payments to veterans who served in Thailand. (Previous exclusion xvi)
• The income exclusion for programs under NAHASDA (Native American Housing Assistance and Self-Determination Act) has been adjusted so that wording more accurately captures the language in the US Code that describes the exclusion. (Previous exclusion xxii)
• The notice clarifies that assistance, benefits, or amounts earned by or provided to individual development accounts are excluded, per the Assets for Independence Act. (Previous exclusion xxiv)

It’s important to note that the listing does not serve as a comprehensive list of exclusions from income; the sources listed here are those that are specifically excluded by Federal Law. Other income exclusions, as listed in the various HUD Handbooks, as well as Notice H 2023-10/PIH 2023-27, remain applicable.