Section 8 income deductions: how to lower your rent share

Last updated June 21, 2026

When your housing authority calculates your rent share, they don't use your full gross income. They first subtract a set of HUD-defined deductions to arrive at your adjusted income — and it's adjusted income that determines what you pay.

This distinction matters. A household earning $24,000 per year and a household with the same income but two children and a disabled household member will have very different rent shares, because the second household has deductions the first doesn't.

Most people know roughly what they earn. Fewer know which deductions they're entitled to claim. Here's the complete list.

How the calculation works

The formula is:

Gross income → subtract deductions → Adjusted income → multiply by 30% → Annual rent share → divide by 12 → Monthly rent share

Your monthly rent share is what you pay directly to your landlord. The voucher covers the difference between your rent share and the contract rent (up to the payment standard).

Claiming every deduction you're entitled to reduces your adjusted income, which reduces your rent share directly — dollar for dollar.

The deductions

Dependent deduction: $480 per dependent

For every household member who is a dependent — a child under 18, a full-time student of any age, or a disabled household member who is not the head of household or their spouse — you deduct $480 per year from gross income.

A family with two children under 18 deducts $960 per year. That reduces their monthly rent share by $24 (30% of $960 ÷ 12). Over a year, that's $288 back in your pocket.

Who counts: Children under 18, regardless of school enrollment. Adult children who are full-time students (regardless of age). Household members with disabilities who are not the head of household or spouse.

Who doesn't count: The head of household and their spouse, regardless of age or disability status (they have their own separate deductions).

Elderly or disabled household deduction: $400

If the head of household or their spouse is age 62 or older, or has a disability, the household receives a flat $400 deduction from gross income per year.

This applies only once — you don't double it if both the head and spouse qualify.

Childcare deduction: actual costs enabling work or school

If you pay for childcare so that you (or your spouse) can work, actively look for work, or attend school, those costs are deductible — up to the amount of earned income generated by the work or school they enable.

For example: if you pay $600/month in childcare to work a job that earns $1,800/month, you can deduct up to $600/month. If your childcare costs $600/month but you only earn $400/month from work, the deduction is capped at $400.

What qualifies: Licensed childcare providers, after-school programs, daycare, and in-home care for children under 13. Care must be for children under 13.

What to bring at recertification: Receipts, invoices, or a letter from your childcare provider showing what you pay and when.

Medical expense deduction (elderly and disabled households only)

This deduction is available only to households where the head of household or spouse is age 62 or older, or has a disability.

You can deduct unreimbursed medical expenses that exceed 3% of your gross annual income. Only the amount above the 3% threshold is deductible.

Example: Household gross income is $18,000/year. 3% of $18,000 is $540. If you had $1,800 in unreimbursed medical costs last year, you can deduct $1,800 − $540 = $1,260.

Medical expenses that count: prescription costs, health insurance premiums (not reimbursed by employer or Medicaid), co-pays, dental and vision care, over-the-counter medications if prescribed by a doctor, durable medical equipment, transportation to medical appointments.

What to bring: Receipts, explanation of benefits statements, premium payment records. The housing authority will ask for documentation at recertification.

Disability assistance expense deduction

Available to any household (not limited to elderly/disabled heads of household). If a household member has a disability, you can deduct costs for:

• Attendant care: Payments to someone who assists a disabled household member with daily living activities
• Auxiliary apparatus: Equipment not covered by insurance that enables the disabled person to work — a wheelchair, hearing aids, assistive software, specialized vehicle modifications

The deduction is capped at the earned income generated by the household member who would not be able to work without the assistance. If the disabled person doesn't work, the deduction is still available but limited to the earned income of the spouse if the care enables the spouse to work.

This deduction is less commonly claimed than it should be. If you're paying out of pocket for a home health aide or specialized equipment, bring that documentation to your next recertification.

How to claim your deductions

You don't automatically receive deductions you're entitled to. You have to tell your housing authority what applies to your household and bring documentation to support it.

At your annual recertification appointment:

• List all household members and their relationship to the head of household
• Disclose the ages of all household members (triggers the dependent and elderly deductions)
• Report any household member's disability (triggers relevant deductions)
• Bring receipts for childcare, medical expenses, and disability assistance costs
• Tell the housing specialist if any of the deductions above apply — don't assume they'll ask

If you missed a deduction in a prior year, you generally can't claim it retroactively, but you can begin claiming it at your next recertification.

Running the numbers

The combined effect of multiple deductions can be significant. Here's a simple example:

| Household | Gross Income | Deductions | Adjusted Income | Monthly Rent Share | |---|---|---|---|---| | Single adult, no deductions | $18,000 | $0 | $18,000 | $450 | | Single parent, 2 children | $18,000 | $960 | $17,040 | $426 | | Elderly couple, $1,200 medical costs | $18,000 | $400 + $660* | $16,940 | $424 | | Parent, 2 kids, $500/mo childcare | $18,000 | $960 + $6,000 | $11,040 | $276 |

*$1,200 medical − ($18,000 × 3% = $540) = $660 deductible

The childcare deduction in the last row cuts the monthly rent share by nearly $175 compared to the same income with no deductions. That's $2,100 per year.