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PART III - EMPLOYER CERTIFICATION
Signature Name and Title Date
SUBJECT: Income Certification - explanation of income certificates
In order for the revenue bonds issued to finance this multifamily housing project to qualify as tax-
exempt under Sections 103 (a) and 142 (a) (7) of the Internal Revenue Code of 1986, as amended, either (i)
20 percent or more of the units in each multi-family residential rental project must be occupied by
individuals whose income is 50 percent or less of the "area median gross income" or (ii) 40 percent or more
of the units must be occupied by individuals whose income is 60 percent or less of the area median gross
income, depending on which test is elected. The Newport News Redevelopment and Housing Authority
has elected the 40-60 test as its "applicable income limit." In determining whether an individual or family
meets the "applicable income limit," appropriate adjustments for family size must be made. The purpose
of the Income Certification is to assist in determining whether the occupants of a particular unit satisfy the
"applicable income limit" requirements for federal tax purposes.
Sections 1, 2, 3 and 8 of the Certificate asks the occupants to list their names, relationship, ages,
and whether they are students. Section 3 of the Certificate asks whether any of the students listed in
Section 1 are able to file a joint return for federal income tax purposes (i.e., are they married). Section 6 of
the Certificate asks each occupant to list his/her anticipated annual income, as defined. Finally, Section 7
asks the occupants to estimate the value of all "capital investments" (excluding "necessary items"), the
estimated amount of income expected to be derived from these "capital investments", and the amount of
income (that has already been included in Section 6 of the Certificate) expected to be derived from these
"capital investments".
The information provided in Sections 1 through 8 of the Certificate should be sufficient to
determine whether an individual(s) or the family meets the "applicable income limit" for federal income
tax purposes.
The Income Tax Regulations provide that the occupants of a unit shall not be considered to be
within the "applicable income limit" if all of the occupants are students no one of whom is entitled to file a
joint return for federal income tax purposes. Thus, if Section 1 of the Certificate indicates that all of the
occupants are students, and if Section 8 of the Certificate indicates that none of the students are able to file
a joint return for federal income tax purposes, the occupants are not within the "applicable income limit"
even if the occupants have no income.
Assuming the occupants of the units are not all students, none of whom are entitled to file a joint
return for federal income tax purposes, the next step in filling out the Certificate is to determine the
"anticipated annual income" of the occupants of the unit for the "certification year." The "certification
year" is the twelve-month period of time that begins on the date the unit is first occupied. Thus, if the
Certification is completed before the prospective occupants move in, the occupants should recertify the
Certificate on the date they actually move into the unit so that you may determine whether they qualify as
being within the "applicable income limit."
All payments from all sources received by the Family head (even if temporarily absent) and each
additional member of the Family household excluding only the income from employment of children
(including foster children) under the age of 18 years that are members of the household should be included
in "anticipated annual income." For example, if a 17-year old son or daughter has a part- or full-time job
that pays $5,000 per year and has income from bank deposits of $100 per year, only the $100 should be
listed. Sections 2 and 3 of the Certificate indicate the various relationships of the occupants in a household
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