Question

"We have tenants who are veterans and who receive service-connected disability benefits. We read your blog post about this issue last year and seem to recall that these are now excluded from income. However, someone else is saying that these are only excluded for veterans who are also receiving VASH assistance. Is this income limitation only applicable to VASH recipients, or does it apply to all veterans receiving service-related disability payments?

Answer

Summary: The exclusion of service-connected disability benefits only applies to VASH assistance recipients. It does not apply to other veterans who receive this type of assistance. 

Our original Blog post discussing the HUD and IRS Notices referred to in the question is HERE.  

Recently, several clients have asked similar questions. We recommend that the person review our blog post again and read the IRS Revenue Procedure linked there for more details. However, based on the HUD exception, the IRS discusses the exception and then says, under the section "Scope" that "this revenue procedure applies for purposes of determining income under §§142(d) [bond] and 42 [LIHTC] of prospective and current tenants who, as of the date of the income determination, are approved to receive or are currently receiving assistance under the HUD–VASH program and to whom the HUD–VASH income eligibility waiver applies (In-scope Tenants)."

Confusion on this point is understandable. It is unusual for an exclusion to be based on the specific rental assistance that a family is receiving. However, we do note that, for years, student financial assistance has been handled differently for those receiving a specific type of rental assistance (specifically Section 8) and those who do not. HOTMA guidance continues this approach for the foreseeable future.    

Advertisement

Registration is open for a short time!

Two unique training opportunities! Online on-demand with live Q&A, too!

Do you want a deep dive into HOTMA or take advanced LIHTC training to prep for the HCCP Exam? 

70% of states are applying HOTMA and many are also seeking online training to prepare for the HCCP exam. Brush up in easy-to-apply, twice-weekly online on-demand videos with live Q&A sessions!

Click on the images below for more information on each course.