Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Verifying Untaxed Income and Benefits

AwardYear: 1997-1998
ChapterNumber: 4
ChapterTitle: Discretionary Verification
Section: Verifying Untaxed Income and Benefits

Welfare Benefits

Generally, "welfare benefits" include the untaxed income that
individuals receive from federal or state public assistance programs,
such as Supplemental Security Income (SSI) and Aid to Families
with Dependent Children (AFDC). Receipt of these benefits can be
verified by contacting the paying offices or through documentation
available from the applicant.

Worker's Compensation

These benefits can be verified through the applicant's employer or
with documentation available from the applicant. Check to see if the
applicant's workers' compensation benefits have covered medical
expenses claimed by the applicant.

Veterans Noneducational Benefits

These benefits result from programs such as Death Pension or
Dependency and Indemnity Compensation (DIC) and can be verified
through the Department of Veterans' Affairs or through
documentation available from the applicant.

Housing, Food, and Other Living Allowances

This category applies only to allowances paid as job compensation--
for example, to members of the military or clergy. Rent subsidies for
low-income housing should not be counted as income. In verifying
this amount, you should include cash payments and assess the cash
value of the benefits.

Cash Support

Any cash support the applicant receives from a friend or relative
(other than the parent, if the applicant is dependent) must be reported
as untaxed income. Cash support includes payments made on the
applicant's behalf. For example, if the applicant's uncle pays the
applicant's rent or utility bill, the applicant must report that amount
as untaxed income.

Untaxed Portion of Pensions

This amount can be verified from IRS Form 1040, line 15a minus
15b and 16a minus 16b; or 1040A, line 10a minus 10b and line 11a
minus 11b (excluding rollovers).

Payments to Tax-Deferred Pension and Savings Plan

These payments include untaxed portions of 401(k) and 403(b) plans
and can be paid directly or withheld. Amounts can be verified with
W-2 forms or a signed statement from the applicant.

Tax-Exempt Interest Income

This amount can be verified from IRS Form 1040 or 1040A, line 8b.

Other Untaxed Income and Benefits

This would include benefits such as Black Lung Benefits, Refugee
Assistance, and untaxed portions of Railroad Retirement Benefits.
To verify these income and benefit amounts, you may accept a
statement, signed by the applicant, detailing the sources and the
amounts received. (If the applicant completed a verification
worksheet, he or she may have included this statement.)

Last Modified: 07/29/1998