Full-time Student Living with Parents – Dependent or NOT!

We recently had some discussion in the office regarding how much income to count for a student.  At issue is whether a full time student that does not meet the IRS criteria for dependency should have their entire income counted, or just the $480. 

Review the following example: A family of three people wants to move into a Section 42 property.  The income limit is $50,000.  The parents are listed as the heads of household and have $25,000 in income.  Their son has $35,000 in income.  The son is a 27-year old full-time student and files his own tax return.  He is not listed as a dependent on his parent’s return.

Per Section 5-6 of the HUD 4350 a dependent is a family member who is under 18 years of age, is disabled, or is a full time student.  It also says that when full time students age 18 years of age or older are dependents, only $480 of their earned income will be counted.

After a discussion in our office and guidance from the IRS this household does qualify.  

 Tenant income for the Section 42 program is calculated in a manner consistent with the determination of income under Section 8, not in accordance with determination of gross income for federal tax liability. 

Written by Cathy Turner, Spectrum Enterprises


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