HUD to Delay 2023 Income Limits
HUD normally publishes income limits on April 1. However, HUD recently announced that it intends to release the FY23 median family income and income limits on or about May 15, 2023, which is approximately six weeks later than normal.
The context: HUD annually calculates estimates of median family income for every area of the country. These estimates are used to calculate various income limits, which are defined as percentages of median family income, and vary by the number of persons in a household. HUD uses income limits to define low-income status and resulting eligibility for many of its housing assistance programs.
Since FY 2011, HUD has based its median family income estimates on data from the Census Bureau’s American Community Survey (ACS). Since FY 2012, there has been a three-year lag between the ACS estimates and the fiscal year for which the income limits are in effect. For example, the FY 2022 median family incomes and income limits were based on the ACS 2019 data.
On July 29, 2021, the Census Bureau announced that it would not release standard one-year estimates from the 2020 ACS because of the impacts of the COVID–19 pandemic on data collection.
What you need to know: Because of the pandemic, HUD will use 2021 ACS data to determine FY23 median family incomes and income limits for LIHTC sites. Owners will have to wait until May 15, 2023, for the new limits.
The IRS allows a transition period from the date of publication to implement the new limits. According to IRS Revenue Ruling 94-57, income limits must be implemented on the effective date or no more than 45 days from the published date. So, if the 2023 income limits for the Multifamily Tax Subsidy Projects (MTSP) housing programs are released on May 15, 2023, the 2023 limits must be implemented no later than June 29, 2023, for LIHTC sites.