D.C. Mun. Regs. tit. 14, § 6502
6502.1 Unless specifically excluded by the regulations (see the section on Annual Income Exclusions), the income of all family members approved to live in the unit will be counted, even if the family member is temporarily absent from the unit. See § 6201 for DCHA's definition of temporarily absent.
6502.2 DCHA is required to count all income anticipated to be received from a source outside the family during the twelve (12) month period following admission or annual reexamination effective date.
6502.3 DCHA generally shall use current circumstances to determine anticipated income for the coming twelve (12) month period, following the verification requirements outlined in Chapter 66. HUD authorizes DCHA to use other than current circumstances to anticipate income when:
6502.4 DCHA will use HUD's Enterprise Income Verification (EIV) system as required by HUD and follow all verification policies as outlined in Chapter 66.
6502.5 When DCHA cannot readily anticipate income based upon current circumstances (e.g., in the case of seasonal employment, unstable working hours, or suspected fraud), DCHA will calculate income based on patterns of employment, paid benefits, and receipt of other income and will use the results of this analysis to establish annual income;
a change before its effective date would create a hardship for the family. In such cases, DCHA will calculate annual income using current circumstances and then require an interim reexamination when the change actually occurs.
6502.6 The earned income of each member of the family who is eighteen (18) years of age or older, or who is the head of household or spouse/cohead regardless of age, is included in annual income. Income received as a day laborer or seasonal worker is also included in annual income, even if the source, date, or amount of the income varies.
(a) “Earned income” means income or earnings from wages, tips, salaries, other employee compensation, and net income from self-employment. Earned income does not include any pension or annuity, transfer payments (meaning payments made or income received in which no goods or services are being paid for, such as welfare, Social Security, and governmental subsidies for certain benefits), or any cash or in-kind benefits.
(b) A “day laborer” is defined as an individual hired and paid one day at a time without an agreement that the individual will be hired or work again in the future.
(c) A “seasonal worker” is defined as an individual who is hired into a short-term position (e.g., for which the customary employment period for the position is six months or fewer) and the employment begins about the same time each year (such as summer or winter). Typically, the individual is hired to address seasonal demands that arise for the particular employer or industry.
6502.7 DCHA will include in annual income the full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation.
6502.8 All regular pay, special pay, and allowances of a member of the Armed Forces are counted except for the special pay to a family member serving in the Armed Forces who is exposed to hostile fire.
6502.9 Employment income earned by minors is not included in annual income. All other sources of unearned income for minors, except those specifically excluded by the regulations, are included.
6502.10 The earned income of a dependent full-time student in excess of the amount of the dependent deduction is excluded from annual income. All sources of unearned income, except those specifically excluded by the regulations, are included.- (a) A family member other than the head of household or spouse/cohead is considered a dependent full-time student if they are attending school or vocational training on a full-time basis.
- (b) Full-time status is defined by the educational or vocational institution the student is attending.6502.11 HOTMA removed the statutory authority for the Earned Income Disallowance (EID). The EID is available only to families that are eligible for and participating on the program as of December 31, 2023, or before; no new families may be added on or after January 1, 2024.6502.12 If a family is receiving the EID prior to or on the effective date of December 31, 2023, they are entitled to the full amount of the benefit for a full twenty-four (24) month period.6502.13 The policies below are applicable only to such families. No family will still be receiving the EID after December 31, 2025. The EID will sunset on January 1, 2026, and DCHA policies below will no longer be applicable as of that date or when the last qualifying family exhausts their exclusion period, whichever is sooner:- (a) Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member's current income with their 'baseline income.' The family member's baseline income is their income immediately prior to qualifying for the EID. The family member's baseline income remains constant throughout the period that they are participating in the EID.
- (b) During the initial exclusion period of twelve (12) consecutive months, the full amount (one hundred percent (100%)) of any increase in income attributable to new employment or increased earnings is excluded.
- (c) During the second twelve (12) month exclusion period, DCHA will exclude fifty percent (50%) of any increase in income attributable to new employment or increased earnings.
- (d) The EID has a two-year (24-month) lifetime maximum. The two-year eligibility period begins at the same time that the initial exclusion period begins and ends twenty-four (24) months later. During the twenty-four (24)
month period, an individual remains eligible for EID even if they begin to receive assistance from a different housing agency, move between public housing and Section 8 assistance, or have breaks in assistance. The EID will sunset on January 1, 2026. In no circumstances will a family member’s exclusion period continue past January 1, 2026.
6502.14 Annual income includes net income from the operation of a business or profession. “Net income” is gross income minus business expenses that allows the business to operate. “Gross income” is all income amounts received into the business, prior to the deduction of business expenses.
(a) Expenditures for business expansion or amortization of capital indebtedness may not be used as deductions in determining net income.
(1) “Business expansion” is defined as any capital expenditures made to add new business activities, to expand current facilities, or to operate the business in additional locations.
(2) “Capital indebtedness” is defined as the principal portion of the payment on a capital asset such as land, buildings, and machinery. This means DCHA will allow as a business expense interest, but not principal, paid on capital indebtedness.
(b) An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations.
(c) Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family.
(d) Net income will be included when it matches gross income when no business expenses are reported and/or verified by the family.
(e) If the net income from a business is negative, no business income will be included in annual income; a negative amount will not be used to offset other family income.
(f) If a business is co-owned with someone outside the family, the family must document the share of the business it owns. If the family’s share of the income is lower than its share of ownership, the family must document the reasons for the difference.
6502.15 If a business entity (e.g., limited liability company or limited partnership) owns an
asset, then the family's asset is their ownership stake in the business, not some portion of the business's assets. However, if the family holds the assets in their own name (e.g., they own one-third of a restaurant) rather than in the name of a business entity, then the percentage value of the asset owned by the family is what is counted toward net family assets.
6502.16 Annual income includes income received as an independent contractor is included in annual income, even if the source, date, or amount of the income varies.
(a) An 'independent contractor' is defined as an individual who qualifies as an independent contractor instead of an employee in accordance with the Internal Revenue Code Federal income tax requirements and whose earnings are consequently subject to the Self-Employment Tax. In general, an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.
6502.17 Periodic payments are forms of income received on a regular basis. These will be included unless excluded under the section on Annual Income Exclusions.
(a) Income that has a discrete end date and will not be repeated beyond the coming year is excluded from a family's annual income because it is nonrecurring income. However, this does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one (1) year that can be extended.
(b) Insurance payments and settlements for personal or property losses, including but not limited to payments under health insurance, motor vehicle insurance, and workers' compensation, are excluded from annual income.
(c) Periodic payments paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that are received in lieu of wages for workers' compensation are included in annual income. Payments received in lieu of wages for worker's compensation are excluded, even if paid in periodic payments, if the income will last for a period of less than one year.
6502.18 DCHA will include in annual income lump sums received as a result of delays in processing periodic payments (other than those specifically excluded by the regulation), such as unemployment or welfare assistance.
(a) When a delayed-start payment is received that is to be included
and the family reports this during the period in which DCHA is processing a regular recertification, DCHA will adjust the family's rent retroactively for the period the payment was intended to cover.
(b) If the delayed-start payment is received outside of the time DCHA is processing a regular recertification, then DCHA will consider whether the amount meets the threshold to conduct an interim reexamination. If so, DCHA will conduct an interim in accordance with policies in this ACOP. If not, DCHA will consider the amount when processing the family's next annual recertification.
6502.19 Income received from any account under a retirement plan recognized as such by the IRS, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals is not considered actual income from assets. However, any distribution of periodic payments from such accounts is included in annual income at the time they are received by the family.
6502.20 An asset moved to a retirement account held by a member of the family is not considered to be an asset disposed of for less than fair market value.
6502.21 DCHA is required to use the gross benefit amount to calculate annual income from Social Security benefits, including Supplemental Security Income (SSI).
(a) Annually in October, the Social Security Administration (SSA) announces the cost-of-living adjustment (COLA) by which federal Social Security and SSI benefits are adjusted to reflect the increase, if any, in the cost of living. Effective the day after the SSA has announced the COLA, DCHA is required to factor in the COLA when determining Social Security and SSI annual income for regular and interim recertifications of family income that have not yet been completed and will be effective January 1 or later of the upcoming year.
(b) When a family member's benefits are garnished, levied, or withheld to pay restitution, child support, tax debt, student loan debt, or other debts, DCHA must use the gross amount of the income, prior to the reduction, to determine a family's annual income.
(c) However, when the SSA overpays an individual, resulting in withholding or deduction from their benefit amount until the overpayment is paid in full, DCHA must use the reduced benefit amount after deducting only the amount of the overpayment withholding from the gross benefit amount.
6502.22 DCHA will include as annual income only those child support and/or alimony payments that are actually received by the family.
6502.23 If no payments have been made in the last one hundred eighty (180) days, DCHA will not include child support and/or alimony in annual income.
6502.24 DCHA will include averaged and annualized payments (excluding lump sum payments) received over the last six (6) full months, unless the family can verify that they expect to receive a different amount going forward.
6502.25 Public (or welfare) assistance—including Temporary Assistance for Needy Families (TANF) and any federal, state, or local government payments to individuals or families that are not excluded by HUD or DCHA —is included as annual income.
6502.26 When a welfare agency imposes a sanction that reduces a resident family’s TANF income because the family commits fraud or fails to comply with the agency’s economic self-sufficiency program or work activities requirement, DCHA must include in annual income the imputed welfare income; however, this requirement does not apply to applicant households (for example, if the individual receiving the TANF was not an assisted resident at the time of the sanction, the welfare income cannot be imputed). The imputed welfare income is the amount that the benefits were reduced as a result of the sanction.
6502.27 DCHA must request from the welfare agency verification of the reason for the reduction of benefits and the amount of the reduction of benefits. The requirement under section § 6502.26 does not apply to reductions in welfare benefits:
(a) At the expiration of the lifetime or other time limit on the payment of welfare benefits,
(b) If a family member is unable to find employment even though the family member has complied with the welfare agency economic self-sufficiency or work activities requirements, or
(c) Because a family member has not complied with other welfare agency requirements.
6502.28 The amount of the imputed welfare income is offset by the amount of additional income the family begins to receive after the sanction is imposed. When the additional income equals or exceeds the imputed welfare income, the imputed income is reduced to zero.
6502.29 A “trust” is a legal arrangement generally regulated by state law in which one party (the creator or grantor) transfers property to a second party (the trustee) who holds the property for the benefit of one or more third parties (the beneficiaries).- (a) For a revocable trust under the control of the family or household, any actual income earned by the trust, regardless of whether it is distributed, shall be considered income to the family at the time it is received by the trust.
- (b) See the section on Annual Income Exclusions for additional information concerning income from trusts.6502.30 Nonrecurring income, which is income that will not be repeated beyond the coming year (such as twelve (12) months following the effective date of the certification) based on information provided by the family, is excluded from annual income. See the section on Annual Income Exclusions.- (a) Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income as nonrecurring income, even if the source, date, or amount of the income varies.
- (b) Income that has a discrete end date and will not be repeated beyond the coming year during the family’s upcoming regular recertification period will be excluded from a family’s annual income as nonrecurring income. This exclusion does not include unemployment income and other types of periodic payments that are received at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year that can be extended.6502.31 DCHA will include amounts of financial assistance an individual receives in excess of tuition and other required fees and charges when determining annual income.- (a) Any assistance to students under Section 479B of the Higher Education Act of 1965 (Tile IV of the HEA) will be excluded from the family’s annual income, as will any other grant-in-aid, scholarship, or other assistance amounts an individual receives for the actual covered costs charged by the institute of higher education not otherwise excluded by the federally mandated income exclusions. See the section on Annual Income Exclusions.
- (b) For a student who is not the head of household or spouse/co-head, actual covered costs also include the reasonable and actual costs of housing while attending the institution of higher education and not residing in an
assisted unit.
(c) The student financial assistance may be paid directly to the student or to the educational institution on the student's behalf. However, any student financial assistance paid to the student must be verified by DCHA.
(d) DCHA will verify tuition and fees according to its verification policies.
6502.32 DCHA will calculate student financial assistance as follows:
(a) If a student only receives financial assistance under Title IV of the HEA and does not receive any other student financial assistance, DCHA will exclude the full amount of the assistance received under Title IV from the family's annual income. DCHA will not calculate actual covered costs in this case.
(b) If the student does not receive any assistance under Title IV of the HEA but does receive assistance from another source, DCHA will first calculate the actual covered costs to the student in accordance with 24 CFR § 5.609(b)(ii). DCHA will then subtract the total amount of the student's financial assistance from the student's actual covered costs. DCHA will include any amount of financial assistance in excess of the student's actual covered costs in the family's annual income.
(c) When a student receives assistance from both Title IV of the HEA and from other sources, DCHA will first calculate the actual covered costs to the student in accordance with 24 CFR § 5.609(b)(ii). The assistance received under Title IV of the HEA will be applied to the student's actual covered costs first and then the other student financial assistance will be applied to any remaining actual covered costs.
(1) If the amount of assistance excluded under Title IV of the HEA equals or exceeds the actual covered costs, none of the assistance included under other student financial assistance would be excluded from income.
(2) If the amount of assistance excluded under Title IV of the HEA is less than the actual covered costs, DCHA will exclude the amount of other student financial assistance up to the amount of the remaining actual covered costs.
SOURCE: Notice of Final Rulemaking published at 33 DCR 7973, 8027 (December 26, 1986); as amended by Final Rulemaking published at 73 DCR 007351 (May 15, 2026).