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Advanced Income Part 1

Posted on: August 25th, 2015 by Christa Landram No Comments

At recent affordable housing meetings there has been much discussion regarding the challenges that owners are faced with when it comes to different forms of income. Below are some common forms of income challenges that have surfaced recently. In many cases, states have collectively come up with best practices and I have shared them below.
I recently posted an article on common asset mistakes which addressed the recent concerns with Debit Cards. I mentioned that the IRS has provided guidance to treat these like savings accounts, though many state agencies have decided to treat them as checking accounts. I want to add an addendum to this and make mention that the Debit Cards include everything paid with a debit card, e.g., paychecks, Social Security, and child support. Again, the IRS has given guidance, but your state agency may treat it differently. You also want to ask how your state agency wants it verified, as some mention verification such as ATM receipts as being sufficient but others disagree.

Sporadic and seasonal work is very common in states such as Florida and California. A hot topic right now is how many weeks or months of pay do you verify? Currently, there is no regulation addressing the number; however, the trend among the different state agencies is to obtain 12 months’ worth, in order to obtain an accurate picture of each season. This is a matter of interpretation and it is important that however you decide to verify it, you are consistent.

One of the more challenging forms of seasonal pay verification comes into play with migrant farm workers. It is understood that there are some day duty workers who only receive cash. If you come across this, know that there is The Migrant and Seasonal Agricultural Worker Protection Act (MSPA), which protects migrant and seasonal agricultural workers by establishing employment standards related to wages, housing, transportation, disclosures and record keeping. Farm labor contractors are required to register through the Department of Labor. If they do not, they are heavily fined. The first preference is attempt to obtain third-party verification. If you are unable to get that, you can try to obtain pay stubs. Next, you can try for receipts that show how many berries, for instance, they picked. If the form of verification is receipts, you should get as many of those as you can. Finally, have them sign a self-affidavit.

There are many forms of income that can present challenges, much like the ones listed above. When you are faced with a difficult form of income, it is best to contact your state monitor or state agency, for best practices.

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