What Is Deductions
Deductions are specific allowances subtracted from a household's annual gross income to calculate adjusted income under the Section 8 Housing Choice Voucher program. The HUD allows five types of deductions: dependent deductions, elderly/disabled deductions, disability assistance expenses, medical expenses, and childcare expenses.
In Section 8, your rent contribution is based on adjusted income, not gross income. The lower your adjusted income, the lower your tenant-paid portion of rent. This means deductions directly impact how much you pay each month and whether you remain eligible for assistance.
How Deductions Work in Section 8
- Dependent deduction: $480 per dependent per year (2024 rate). A dependent is a household member under 18 or a full-time student under 24, or a disabled/elderly member with gross income under $0 (no earned income).
- Elderly or disabled deduction: $400 per person per year for heads, co-heads, or spouses age 62 or older, or any household member receiving disability benefits.
- Disability assistance expense deduction: Unreimbursed costs for attendant care, equipment modifications, or other disability-related expenses necessary for employment or self-sufficiency.
- Medical expense deduction: Unreimbursed medical costs for elderly or disabled household members, including insurance premiums, prescription costs, therapy, and mobility aids. Must exceed 3% of gross household income to be deductible.
- Childcare expense deduction: Unreimbursed costs for childcare necessary to permit an adult to work or seek employment, up to the amount earned by that household member.
Claiming Deductions
Your Public Housing Authority (PHA) calculates deductions during income recertification. You must provide supporting documentation for all claimed deductions. Medical and disability assistance expenses require receipts, invoices, or statements showing the amount paid. Childcare deductions need provider receipts and proof of employment. Dependent deductions require birth certificates or Social Security cards.
Deductions are recalculated annually at recertification. If your household circumstances change (dependents age out, medical expenses increase), notify your PHA immediately so adjustments can be made mid-year if applicable.
Impact on Rent and Eligibility
Deductions reduce your adjusted income, which reduces your tenant-paid rent (capped at 30% of adjusted income). For example, a household with $30,000 gross income and $1,920 in deductions has adjusted income of $28,080. The difference of $1,920 means lower monthly rent payments. Over a year, proper deductions can save hundreds of dollars in tenant contributions.
Deductions can also affect program eligibility. Some households claiming deductions that push adjusted income below area median income thresholds may qualify for ongoing assistance.
Common Questions
- What happens if I claim a deduction I'm not eligible for? The PHA verifies all deductions during recertification. Fraudulent claims can result in overpayment demands, program termination, and potential legal action. Report only actual expenses with documentation.
- Can I claim medical expenses if I'm under 62 and not disabled? No. Medical expense deductions only apply to elderly (62+) or disabled household members. However, disability-related work expenses (different category) may apply if you have a documented disability.
- If my dependent turns 18, when does the deduction stop? Dependent deductions end in the month following the month the person turns 18, unless they are a full-time student under 24. Your PHA must recalculate at that time.