What Counts as Income? The Top 5 Sources Site Staff Miss 👀

Before you finalize that certification, pause. Take one more look. Then double-check these five income sources that consistently slip through the cracks.

Introduction

Income calculation is the backbone of every certification. Get it right, and your file is audit ready. Miss something, and you're dealing with findings, corrective action plans, and potentially incorrect eligibility determinations.

After reviewing files across Section 8, LIHTC, HOME, and Rural Development properties, I’ve seen the same income sources overlooked time and time again. These aren’t rare edge cases. They’re everyday scenarios that show up in real life — and in your files.

Let’s walk through the Top 5 most commonly missed income sources and how to catch them every time.

1️⃣ Recurring Cash Contributions 💵

What It Is

Regular financial help from family, friends, partners, or anyone contributing money to the household on a consistent basis.

Why It’s Missed

Tenants often don’t think of this as “income.” You’ll hear things like:

• “My mom just helps sometimes.”

• “My boyfriend gives me money for groceries.”

If it’s regular and predictable, it counts.

How to Catch It

Ask directly:

• Does anyone outside the household regularly give you money for rent, bills, groceries, or other expenses?

If yes:

• Determine frequency and amount

• Annualize it

Example:$200/month from grandma = $2,400/year in countable income

Documentation

• Tenant self-certification (source, frequency, amount)

• Statement from contributor if available

💡 Pro Tip: If reported income doesn’t realistically cover rent and expenses, recurring contributions are often the missing piece. Ask the question.

2️⃣ Self-Employment & Side Gigs 📱🚗

What It Is

Gig economy income or side work such as:

• Uber, Lyft, DoorDash, Instacart

• Freelancing

• Babysitting

• Hair braiding

• Lawn care

• Selling online

• Any cash-based work

  
  

Why It’s Missed

Tenants report their W-2 job but forget to mention weekend gigs or cash side work.

If they earned it, you count it.

How to Catch It

Ask:

• Do you earn money from work where you're not someone’s employee?

• Any side jobs, freelance work, or gig apps?

Review bank statements for:

• Venmo deposits

• CashApp transfers

• Platform payments

Documentation

• Two years of tax returns with Schedule C (if available)

• If no tax returns: detailed self-certification with income log

💡 Pro Tip: Bank deposits often tell the real story.

3️⃣ Child Support Actually Received 👨🏾‍👩🏾‍👧🏾

What It Is

Child support received — whether:

• Court-ordered

• Informal

• Regular

• Irregular

Why It’s Missed

Staff may:

• Only count court-ordered support

• Accept “I don’t receive child support” without follow-up

• Ignore partial or inconsistent payments

How to Catch It

Ask:

• Do you receive child support — formal or informal? Even if not every month?

If:

• Court-ordered but not received → verify non-receipt

• Irregular payments → annualize based on actual 12-month history

General Rule

• Section 8 / Part 5: Count amounts actually received

• LIHTC: Typically follows Part 5 methodology (confirm with state guidance)

Documentation

• Court order (if applicable)

• Child support enforcement verification

• Tenant certification of actual amounts received

💡 Pro Tip: If there are minor children and the other parent isn’t in the household, this question should never be skipped.

4️⃣ Student Financial Aid Beyond Tuition 🎓

What It Is

Financial aid (grants, scholarships, loans) exceeding tuition and mandatory fees — the portion available for living expenses.

Why It’s Missed

Staff often:

• Count all aid (incorrect), or

• Exclude all aid (also incorrect in many programs)

This rule varies by program.

How It Works

• Section 8 / Part 5: Generally excluded for students receiving assistance (with exceptions)

• LIHTC: Aid exceeding tuition and required fees is typically counted as income

How to Catch It

Ask:

• Are you receiving financial aid? Grants? Scholarships? Loans?

Then:

• Obtain award letter

• Obtain tuition and fee statement

• Compare totals

• Calculate any excess

Documentation

• Financial aid award letter

• Tuition statement

• Calculation of excess (if applicable)

💡 Pro Tip: This is where knowing your program rules matters. Don’t guess — verify.

5️⃣ Military BAH and BAS 🇺🇸

What It Is

• Basic Allowance for Housing (BAH)

• Basic Allowance for Subsistence (BAS)

These are non-taxable military allowances paid in addition to base pay.

Why It’s Missed

Military Leave and Earnings Statements (LES) look different from civilian pay stubs. Staff unfamiliar with military pay may only count base pay.

How to Catch It

• Request full Leave and Earnings Statement (LES)

• Review entire document

• Identify BAH, BAS, and other allowances

These are countable income for affordable housing purposes.

For programs requiring gross-up of non-taxable income, apply the correct calculation.

Documentation

• Current LES

• Military finance verification (if needed)

💡 Pro Tip: Don’t just look at the bottom-line net pay. Review every pay component listed.

🔎 The Common Thread

Most missed income happens for one reason:

Staff don’t ask the right questions.

Tenants won’t volunteer:

• “My mom sends $300 monthly.”

• “I drive DoorDash on weekends.”

• “I get informal child support.”

You have to ask directly.

Add these to your intake interview checklist:

1️⃣ Does anyone outside the household regularly give you money?

2️⃣ Do you earn income from side jobs or gig work?

3️⃣ Do you receive child support (formal or informal)?

4️⃣ Is anyone in the household receiving financial aid?

5️⃣ Is anyone in the household in the military?

📌 The Bottom Line

These five income sources account for a significant portion of audit findings.

The solution is simple:

✔ Ask better questions

✔ Document clearly

✔ Verify thoroughly

Add these checkpoints to your certification process, and you’ll catch income that would otherwise slip through the cracks.

Need Support Strengthening Your Income Calculation Process?

The TCC Firm partners with owners and management companies to strengthen the entire compliance ecosystem — from hands-on file reviews and income calculation training to workflow development and implementation support.

📩 Email: info@thetccfirm.com

🌐 Website: www.thetccfirm.com

Let’s make compliance manageable — and audit-ready.