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Three Definitions of Income
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Calculating Income Eligibility Contents
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Every
ten years, the Bureau of the Census conducts a complete enumeration
of all residents in the United States. This process involves gathering
extensive information about people and where they live through the
use of a detailed questionnaire -- referred to as the Long Form.
An
entire section of the Long Form includes questions concerning household
income. PJs may choose to use this definition of "annual income"
when determining the eligibility of applicants to their HOME programs.
Types of Income to Count
The
types of income included and excluded in the current Census Long
Form definition of annual income is based upon the Long Form used
in the 1990 census. The following table lists the income inclusions
and exclusions set forth in the 1990 Census Long Form.
Inclusions:
- Wages,
salary, commissions, bonuses and tips from all jobs before deductions
for taxes, bonds, dues or other items.
- Self-employment
net income (after business expenses) from non-farm business, including
proprietorship and partnership.
- Farm
self-employment net income (after operating expenses). Include
amounts from land rented for shares.
- Any
of the following:
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Interest
received or credited to checking and savings accounts, money
market funds, certificates of deposit, individual retirement
accounts (IRAs), KEOGH retirement plans and government bonds.
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Dividends
received, credited or reinvested from ownership of stocks
or mutual funds.
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Profit
(or loss) from royalties or rental of land, buildings or real
estate or roomers or boarders. (Income received from self-employed
persons whose primary source of income is renting properties
or from royalties should be included in number 2 or 3, above.)
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Income
from regular payments from an estate and or trust fund. |
- Social
security or railroad retirement (before Medicare deductions).
- Supplemental
Security Income (SSI), Aid to Families with Dependent Children
(AFDC) or other public assistance or public welfare payments.
- Retirement,
survivor or disability pensions from companies and unions; Federal,
State and local governments; and the U.S. military. Includes regular
income from annuities, IRAs or KEOGH retirement plans.
- Other
sources of income received regularly, including Veterans Administration
(VA) payments, unemployment compensation, child support or alimony
and all other regular payments (e.g., Armed Forces transfer payments,
assistance from private charities, and regular contributions from
persons not living in the household).
Exclusions:
- In-kind
pay such as food, free rent, etc.
- Profit
(or loss) of incorporated businesses owned by the applicant.
- Profit
(or loss) of incorporated farm businesses owned by the applicant
and amounts from land rented for cash.
- Any
of the following:
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Refunds
or rebates of any kind. |
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Withdrawals
from savings of any kind. |
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Capital
gains (or losses) from the sale of homes, shares of stock,
etc. |
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Inheritances
or insurance settlements. |
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Any
type of loan. |
- Assistance
to pay for heating or cooling costs.
Treatment of Assets
Income
from certain assets must be carefully considered when calculating
income under the Census Long Form definition of annual income.
The current list of Census Long Form income inclusions and exclusions
includes the following types of income from assets in the income
calculation:
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Interest,
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Dividends,
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Profit
from royalties or real estate, and |
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Income
from payments from an estate or trust fund. |
The
primary difference between the Part 5 and the Census Long Form definitions
of annual income is in the treatment of assets. The calculation
of Census Long Form annual income does not require the asset calculations
necessary when using the Part 5 definition.
In
addition, some types of assets are not included in the Census Long
Form calculation. Examples include:
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Withdrawals
of savings, |
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Capital
gains (or losses) from the sale of homes, stock, and other property,
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Insurance
settlements, and |
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Assets
disposed of for less than fair market value within two years prior
to the income determination. |
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