Calculating Rental Income for SNAP

Thre are a number of SNAP households who have tenants, including many elders who are "empty nesters" who have rented out a portion of their homes, as well as working families who have multi-family residences or "in-law" apartments rented out. Many low income home owners have high shelter costs due to large initial mortgages, refinancing and/or home improvement loans. The combination of mortgages, real estate taxes, insurance as well as water/sewer, repairs, maintenance and other costs make it hard to make ends meet.

Federal and state SNAP rules treat rental income as a form of "self-employment" unearned or earned income. (Rental income can be earned income where the property owner is "actively engaged in the management of  the property an average of at least 20 hours a week." See 106 CMR 363.220(B)(5)) This means the SNAP household can deduct the costs involved in property ownership to calculate the net rental amount used in the SNAP math. Most households are better off when home ownership costs costs are deducted up front.

How to calculate NET rental income?

Step 1: Determine pro rata share of expenses. Add up total home ownership costs - including water/sewer and other common utilities paid by the homeowner. Divide that by number of units in the property, in a two family house, divide home ownership costs in half.

Step 2:  Subtract the pro rata share of total property costs from the gross rental income - the monthly rent paid by the tenant. Determine if this is "earned" or "unearned income" to the SNAP applicant - based on hours involved in managing and maintaining property.

Calculate the SNAP household’s shelter costs for the SNAP math:  This time, calculate homeowner’spro rata share of home ownership costs but NOT utilities. The water/sewer, garbage costs are utility costs covered by the Standard Utility Allowance (SUA) in addition to electricity, phone and other utilities). Add the heating/cooling Standard Utility Allowance to the home ownership costs (excluding the common utilities mentioned).

Attached are 2 SNAP Rental Income fliers that help explain why the SNAP math matters in both elder/disabled households and working families.The regulations citing these policies are at the bottom. Properly calculated rental income can make a significant difference for SNAP applicants who are trying to hang onto their homes..  Also attached is an excel worksheet you can use to help you with the rental income calculation.