Counting Children of Joint Custody Arrangements

Q One of our low-income applicants is a divorced mother who has joint custody of her two children. The applicant says that, under the joint custody agreement, her children would live with her in the unit most of the time. If we accept this applicant at our site, should we count her children as household members?

A Yes. In Revenue Ruling 90-89, the IRS instructs owners of tax credit sites to follow the rules for the project-based Section 8 program to determine the household size when selecting the appropriate income limit. According to paragraph 3-6(E)(4)(b) of HUD Handbook 4350.3, you must count children who live in a low-income unit as part of the household if they live there at least 50 percent of the time.

The following is a list of people you would not include when counting the number of household members even if they will be living in the unit:

• Live-in aide;
• Guest; or
• A child who will not be living in the unit at least 50 percent of the time.

In this instance, be sure to ask for a copy of the joint custody agreement to verify the arrangement. This way, you’ll be able to show your state housing agency why you counted the children as part of the household. Also remember that whenever you count children as part of a household, you must include their unearned income.