6504 ANNUAL INCOME EXCLUSIONS

6504.1 Subject to applicable HUD guidance and DCHA MTW policy, annual income does not include the types of income listed in this § 6504.6504.2 Per DCHA's MTW, income from assets when the market value of family assets total Fifty Thousand Dollars (\$50,000) or less.6504.3 The following types of trust distributions:- (a) For an irrevocable trust or a revocable trust outside the control of the family or household excluded from the definition of net family assets under 24 CFR § 5.603(b):

- (1) Distributions of the principal or corpus of the trust; and

- (2) Distributions of income from the trust when the distributions are used to pay the costs of health and medical care expenses for a minor.

- (b) For a revocable trust under the control of the family or household, any distributions from the trust; except that 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.6504.4 Earned income of children (including foster children) under the age of eighteen (18) years.6504.5 Payments received for the care of foster children or foster adults, or State or Tribal kinship or guardianship care payments.6504.6 Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and workers' compensation.6504.7 Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member.6504.8 Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled.6504.9 Income of a live-in aide, foster child, or foster adult as defined in 24 CFR §§ 5.403 and 5.603, respectively.

6504.10 Any assistance that section 479B of the Higher Education Act of 1965, as amended, required to be excluded from a family's income including Bureau of Indian Affairs/Education student assistance programs:

(a) If the amount of this excluded assistance equals or exceeds the amount of actual covered costs described under § 6504.11 below, none of the assistance described below is excluded as income.

(b) If the amount of this excluded assistance is less than the amount of actual covered costs described under § 6504.11 below, staff will exclude the lower of:

(1) The total amount of student financial assistance received under § 6504.11, or

(2) The amount by which the actual covered costs (as described below) exceed the assistance excluded under item § 6504.9.

6504.11 Student financial assistance for tuition, books, and supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, and other fees required and charged to a student by an institution of higher education (as defined under Section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002) and, for a student who is not the head of household or spouse, the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit, and expressly for a student who is not the head of household or spouse.

(a) "Student financial assistance" means a grant or scholarship received from:

(1) The federal government;

(2) A state, tribal, or local government;

(3) A private foundation registered as a nonprofit;

(4) A business entity; or

(5) An institution of higher education.

(b) Student financial assistance does not include:

(1) Any assistance that Section 479B of the Higher Education Act of 1965, as amended, requires to be excluded from a family's income (as noted above);

(2) Financial support provided to the student in the form of a fee for services performed (for example, a work study or teaching fellowship that is not excluded);

(3) Gifts, including gifts from family or friends; or

(4) Any amount of the scholarship or grant that, either by itself or in combination with assistance excluded, exceeds the actual covered costs of the student. The actual covered costs of the student are the actual costs of tuition, books and supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, or other fees required and charged to a student by the education institution, and, for a student who is not the head of household or spouse, the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit.

(c) Student financial assistance must be:

(1) Expressly for tuition, books, room and board, or other fees required and charged to a student by the education institution;

(2) Expressly to assist a student with the costs of higher education; or

(3) Expressly to assist a student who is not the head of household or spouse with the reasonable and actual costs of housing while attending the education institution and not residing in an assisted unit.

(d) Student financial assistance may be paid directly to the student or to the educational institution on the student's behalf.

(e) The student financial assistance exclusion applies to both part-time and full-time students.

6504.12 Income and distributions from any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under section 529 of such Code; and income earned by government contributions to, and distributions from, baby bond accounts created, authorized, or funded by Federal, State, or local government.

6504.13 The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.

6504.14 Certain amounts received that are related to participation in the following programs:- (a) Amounts received under HUD-funded training programs (i.e., Step-up program: excludes stipends, wages, transportation payments, childcare vouchers for the duration of the training);

- (b) Amounts received by a person with disabilities that are disregarded for a limited time for purposes of Supplemental Security Income and benefits that are set aside for use under a Plan to Attain Self-Sufficiency (PASS);

- (c) Amounts received by a client in other publicly assisted programs that are specifically for, or in reimbursement of, out-of-pocket expenses incurred (special equipment, clothing, transportation, childcare, etc.) to allow participation in a specific program;

- (d) Amounts received under a client services stipend (not to exceed Two Hundred Dollars (\$200) a month). A client service stipend is a modest amount received by a resident for performing a service for DCHA or the owner, on a part-time basis, that enhances the quality of life in the development. Such services may include but are not limited to, fire patrol, hall monitoring, lawn maintenance, and client initiatives coordination; or

- (e) Incremental earnings and/or benefits to any family member from participation in training programs funded by HUD or in qualifying Federal, State, Tribal, or local employment training programs (including training programs not affiliated with the local government), and training of family members as client management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment training program.6504.15 Reparation payments paid by foreign governments pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era.6504.16 Earned income of dependent full-time students in excess of the amount of the deduction for a dependent.6504.17 Adoption assistance payments for a child in excess of the amount of the deduction for a dependent.

6504.18 Deferred periodic payments of Supplemental Security Income and Social Security benefits that are received in a lump sum payment or in prospective monthly amounts, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts.

6504.19 Payments related to aid and attendance under 38 U.S.C. § 1521 to veterans in need of regular aid and attendance.

6504.20 Amounts received by the family in the form of refunds or rebates under state or local law for property taxes paid on the dwelling apartment.

6504.21 Payments made by or authorized by a State Medicaid agency (including through a managed care entity) or other State or Federal agency to a family to enable a family member who has a disability to reside in the family's assisted unit. Authorized payments may include payments to a member of the assisted family through the State Medicaid agency (including through a managed care entity) or other State or Federal agency for caregiving services the family member provides to enable a family member who has a disability to reside in the family's assisted unit.

6504.22 Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car).

6504.23 Payments received by Tribal members as a result of claims relating to the mismanagement of assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other Federal law.

6504.24 Amounts specifically excluded by any other federal Statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the United States Housing Act of 1937. A notice will be published by HUD in the Federal Register identifying the benefits that qualify for this exclusion. The most recent list of exclusions was published in the Federal Register on January 31, 2024. It includes:

(a) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7 U.S.C. § 2017 (b));

(b) Payments, including for supportive services and reimbursement of out-of-pocket expenses, for volunteers under the Domestic

Volunteer Services Act of 1973 (42 U.S.C. § 5044(f)(1), 42 U.S.C. § 5058) are excluded from income except that the exclusion shall not apply in the case of such payments when the Chief Executive Officer of the Corporation for National and Community Service appointed under 42 U.S.C. § 12651c determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq.) or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater (42 U.S.C. § 5044(f)(1)).

(c) Certain payments received under the Alaska Native Claims Settlement Act (43 U.S.C. § 1626(c));

(d) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. § 5506);

(e) Payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program (42 U.S.C. § 8624(f)(1));

(f) Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94-540, section 6);

(g) The first Two Thousand Dollars ($2,000) of per capita shares received from judgment funds awarded by the National Indian Claims Commission or the U. S. Claims Court, the interests of individual Indians in trust or restricted lands, and the first Two Thousand Dollars ($2,000) per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands. This exclusion does not include proceeds of gaming operations regulated by the Commission (25 U.S.C. § 1407-1408);

(h) Amounts of student financial assistance funded under Title IV of the Higher Education Act of 1965 (20 U.S.C. § 1070), including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs (20 U.S.C. § 1087uu). For Section 8 programs only (42 U.S.C. § 1437f), any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965 (20 U.S.C. § 1001 et seq.), from private sources, or an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. § 1002)), shall not be

considered income to that individual if the individual is over the age of Twenty-Three (23) with dependent children (Pub. L. 109-115, Section 327) (as amended);

1. (i) Payments received from programs funded under Title V of the Older Americans Act of 1985 (42 U.S.C. § 3056(g));
2. (j) Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund (Pub. L. 101-201) or any other fund established pursuant to the settlement in In Re Agent Orange Product Liability Litigation, M.D.L. No. 381 (E.D.N.Y.);
3. (k) Payments received under the Maine Indian Claims Settlement Act of 1980 (Pub. L. 96-420 Section 9(c));
4. (l) The value of any childcare provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. § 9858q);
5. (m) Earned income tax credit (EITC) refund payments received on or after January 1, 1991 (26 U.S.C. § 32(j));
6. (n) The amount of any refund (or advance payment with respect to a refundable credit) issued under the Internal Revenue Code is excluded from income and assets for a period of twelve (12) months from receipt (26 U.S.C. § 6409);
7. (o) Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of the Mescalero Reservation (Pub. L. 95-433 Section 2);
8. (p) Allowances, earnings and payments to AmeriCorps participants under the National and Community Service Act of 1990 (42 U.S.C. § 12637(d));
9. (q) Any allowance paid to children of Vietnam veterans born with spinal bifida (38 U.S.C. § 1802-05), children of women Vietnam veterans born with certain birth defects (38 U.S.C. § 1811-16), and children of certain Korean and Thailand service veterans born with spinal bifida (38 U.S.C. § 1821-22) is excluded from income and assets (38 U.S.C. § 1833(c));
10. (r) Any amount of crime victim compensation that provides medical or other assistance (or payment or reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received through a crime victim

assistance program, unless the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime (34 U.S.C. § 20102(c));

(s) Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1998 reauthorized as the Workforce Innovation and Opportunity Act of 2014 (29 U.S.C. § 3241(a)(2));

(t) Any amount received under the Richard B. Russell School Lunch Act (42 U.S.C. § 1760(e)) and the Child Nutrition Act of 1966 (42 U.S.C. § 1780(b)), including reduced-price lunches and food under the Special Supplemental Food Program for Women, Infants, and Children (WIC);

(u) Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990 (Pub. L. 101-503 Section 8(b)); this exclusion also applies to assets;

(v) Payments from any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in monthly prospective amounts (42 U.S.C. § 1437a(b)(4));

(w) Any amounts:

(1) Not actually received by the family;

(2) That would be eligible for exclusion under 42 U.S.C. § 1382b(a)(7); and

(3) Received for service-connected disability under 38 U.S.C. Chapter 11 or dependency and indemnity compensation under 38 U.S.C. Chapter 13 (25 U.S.C. § 4103(9)(C)) as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 (Pub. L. 111-269 Section 2) to the definition of income applicable to programs under the Native American Housing Assistance and Self-Determination Act (NAHASDA) (25 U.S.C. § 4101 et seq.);

(x) A lump sum or periodic payment received by an individual Indian pursuant to the Class Action Settlement Agreement in case entitled Elouise Cobell et al. v. Ken Salazar et al., 816 F.Supp.2d 10 (Oct. 5, 2011 D.D.C.) for a period of one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010 (Pub. L. 111-291 Section 101(f)(2));

(y) Any amounts in an individual development account are excluded from assets and any assistance, benefit, or amounts earned by or provided to the individual development account are excluded from income as provided by the Assets for Independence Act, as amended (42 U.S.C. § 604(h)(4));

(z) Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in Notice PIH 2013–1 and 2013-55 must be excluded from annual income unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe’s private bank account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving the per capita payments as described in IRS Notice 2013–1. The first Two Thousand Dollars ($2,000) of per capita payments are also excluded from assets unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe’s private bank account in which the Tribe has deposited the settlement proceeds (25 U.S.C. § 117b(a), 25 U.S.C. §1407);

(aa) Federal assistance for a major disaster and emergency received by individuals under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Pub. L. 93-288, as amended) and comparable disaster assistance provided by States, local governments, and disaster assistance organizations (42 U.S.C. § 5155(d));

(bb) Any amount in an ABLE account, distributions from and certain contributions to an ABLE account established under the ABLE Act of 2014 (Pub. L. 113–295.), as described in Notice PIH 2019–09/H 2019–06 or subsequent or superseding notice is excluded from income and assets; and

(cc) Assistance received by a household under the Emergency Rental Assistance Program pursuant to the Consolidated Appropriations Act, 2021 (Pub. L. 116–260, Section 501(j)), and the American Rescue Plan Act of 2021.

6504.25 Replacement housing gap payments made in accordance with 49 CFR Part 24 that offset increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another Federally subsidized housing unit. Such replacement housing gap payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the displaced person retains or continues to receive the replacement housing gap payments;

6504.26 Nonrecurring income, which is income that will not be repeated in the coming year based on information provided by the family. Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income under this paragraph, even if the source, date, or amount of the income varies. Nonrecurring income includes:

(a) Payments from the U.S. Census Bureau for employment (relating to decennial census or the American Community Survey) lasting no longer than one hundred eighty (180) days and not culminating in permanent employment;

(b) Direct Federal or State payments intended for economic stimulus or recovery;

(c) Amounts directly received by the family as a result of State refundable tax credits or State tax refunds at the time they are received;

(d) Amounts directly received by the family as a result of Federal refundable tax credits and Federal tax refunds at the time they are received;

(e) Gifts for holidays, birthdays, or other significant life events or milestones (such as wedding gifts, baby showers, anniversaries);

(f) Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food bank or similar organization; and

(g) Lump-sum additions to net family assets, including but not limited to lottery or other contest winnings.

6504.27 Civil rights settlements or judgments, including settlements or judgments for back pay;

6504.28 Income received from any account under a retirement plan recognized as such by the Internal Revenue Service, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals; except that any distribution of periodic payments from such accounts shall be income at the time they are received by the family;

6504.29 Income earned on amounts placed in a family's Family Self Sufficiency Account; and

6504.30 Gross income a family member receives through self-employment or operation of a business, except where gross income equals net income.

SOURCE: Notice of Final Rulemaking published at 33 DCR 7973, 8028-8029 (December 26, 1986); as amended by notice of Final Rulemaking published at 54 DCR 12321 (December 21, 2007); as amended by Final Rulemaking published at 73 DCR 007351 (May 15, 2026).