Counting Uber and Lyft Income for Section 8 can be confusing. More residents are earning income through these and other gig apps. But how do you count that income correctly? If you’re a property manager at a HUD property, you’ve probably asked this question. Good news—HUD has clarified the process.
HUD Treats Uber, Lyft Income as Self-Employment Income
According to HUD Handbook 4350.3, Chapter 5-6, income from Uber and similar platforms is self-employment income. Residents are considered independent contractors, not employees. That means their income must be calculated like a small business.
So, even if your tenant doesn’t view their Uber or Lyft income as a business, HUD does. You must document it accordingly.
Net Income, Not Gross
HUD wants you to count net income, not gross. Net income equals gross earnings minus allowable business expenses. That includes:
- Gas and mileage
- Vehicle maintenance
- Tolls and parking fees
- Car loan interest (business use only)
- Items for passengers (water, gum, etc.)
- Advertising costs
- Depreciation (straight-line method only)
If a vehicle is used for both personal and business reasons, only the business-use portion of expenses may be deducted.
Verification Methods for Property Managers
HUD outlines several ways to verify Uber and Lyft income for Section 8:
- Tax Returns Most importantly, request the tenant’s full tax return with Schedule C. This form outlines income and expenses for their business.
- 1099-K Uber and Lyft typically issue a 1099-K. It summarizes total income but doesn’t show expenses, so it’s not enough on its own.
- Monthly Summaries Ask tenants for monthly or annual summaries from Uber or Lyft, which often include key financial data.
- Notarized Statement If tax returns aren’t available, you may accept a notarized affidavit detailing estimated net income. Use this when residents are new to rideshare work or haven’t filed yet.
Documentation Best Practices
When in doubt, document everything:
- Note how many hours the tenant works weekly
- Estimate average weekly or monthly pay
- Record assumptions used for calculating income
- Include copies of all documentation and statements
HUD expects owners and agents to make reasonable judgments and document those decisions clearly. If you’re unsure, contact your state housing agency for additional guidance.
Why This Matters
Income from the gig economy isn’t going away. In fact, more residents are opting for flexible work arrangements, such as those offered by Uber and Lyft. As property managers, you don’t need to fear this trend, but you do need to verify and document properly.
Don’t penalize residents for trying to earn. Instead, empower them with clarity and guide them through what documentation is required.
