Income eligibility determination is an important part of documenting national objective compliance for activities carried out with CDBG-CV funds. Income eligibility is verified a little differently, depending upon the activity you fund. Generally, direct benefit activities documented under the LMI national objective, such as economic development loans and assistance to microenterprises, must be documented as LMI using full income determination and documentation. For individual applicants for assistance, earnings and leave statements, letters identifying the amount of unemployment benefits, Form 1040 tax forms, and letters from other programs that an individual participates in that has the same or more stringent income requirements as the CDBG program may be provided to document income. For owners of microenterprises that state they are low and moderate income, Form 1040 tax forms and tax forms filed by the business that show the businesses’ income may be provided to document the owner’s or owners’ status as low- and moderate-income. For CDBG-CV, HUD has granted a waiver for the LMI jobs national objective to streamline income verification by accepting annual wage information from an assisted business demonstrating that individuals that apply for or hold jobs earn less than the Section 8 low-income limit for a one-person family. For other activities such as public services (e.g., provision of food from a food bank or health services (coronavirus testing)) that don’t meet the LMI Area Benefit criteria, self-certifications of income are acceptable.
When full income determination and documentation is required, there are two different definitions of income available to CDBG-CV grantees, one of which must be chosen for each program administered and used consistently across beneficiaries served:
- In Part 5 (Section 8) - 24 CFR 5.609, annual income is defined. For all programs within the Office of Block Grant Assistance (OBGA), the calculation of imputed assets (include a percentage of the cash value) is not included.
- IRS 1040 – The most current IRS 1040 tax form inclusions and exclusions is used in this definition.
- Notice: CPD-21-03: Unemployment Insurance Benefits Under the CARES Act, 2021 Appropriations Act, and Presidential Memorandum
- Part 5 Income Inclusions and Exclusions (this tool is not specific to CDBG-CV)
- Self-Certification of Income Form (may be adopted for CDBG-CV activities; however, Part II and the piece of Part III with the cash value of assets and the imputed calculation do not apply)
- CDBG Income Limits (this tool is not specific to CDBG-CV)