IRS Low Income Certification Guidelines: How to Qualify
Understand the official IRS guidelines for low-income certification. This guide clarifies the financial and household requirements for tax program eligibility.
The Internal Revenue Service provides a low-income certification process to verify an individual’s financial status. This verification allows taxpayers who meet specific criteria to qualify for certain programs and fee waivers designed to reduce financial burdens. These programs include assistance from Low Income Taxpayer Clinics (LITCs) and waivers for the application fee associated with an Offer in Compromise, which is an agreement to settle a tax debt for less than the full amount owed.
Determining Eligibility for Low-Income Status
Eligibility for IRS low-income status hinges on two primary factors: your household’s income and its size. The IRS uses the Federal Poverty Guidelines (FPG) issued annually by the Department of Health and Human Services as the benchmark for these determinations. For many IRS programs, such as qualifying for LITC assistance, the relevant threshold is 250% of the poverty guideline for your household size.
Defining your household for IRS purposes is a specific calculation. It includes the taxpayer, their spouse if married, and all dependents claimed on their tax return. It may also include other individuals who live in the home and for whom the taxpayer provides more than half of their financial support, even if they are not claimed as dependents.
The income calculation is equally specific, encompassing most sources of money you receive. This includes wages, salaries, tips, and net earnings from self-employment. It also covers unearned income such as Social Security benefits, unemployment compensation, interest, dividends, and retirement distributions. Certain amounts, like funds from specific public assistance programs, may be excluded from this calculation.
Your qualification can be determined in one of two ways. The primary method is based on the Adjusted Gross Income (AGI) reported on your most recently filed Form 1040 tax return. If your AGI is at or below the specified poverty guideline percentage for your family size, you meet the income criteria. Alternatively, if your AGI is too high, you may still qualify based on your current household’s gross monthly income, a figure you calculate and certify on specific IRS forms.
Required Information and Documentation
To substantiate a claim for low-income status, you must gather specific documents that verify your household income and size. This evidence includes recent pay stubs for all working members of the household and a copy of your most recently filed federal tax return (Form 1040). Further documentation may be required depending on your sources of income.
- Your annual benefit statement for Social Security (Form SSA-1099)
- A statement of unemployment benefits received
- Court orders for child support payments
- Pension or retirement plan statements
- Any records of interest or dividend income
The IRS utilizes specific forms for the certification process, which must be downloaded from the official IRS website. For those seeking help from a Low Income Taxpayer Clinic, Form 13614-C, the Intake/Interview & Quality Review Sheet, is the document used. If you are applying for a waiver of the Offer in Compromise application fee, you will need to complete Form 656-A, Income Certification for Offer in Compromise Application Fee.
The Certification Submission Process
The method of submission depends entirely on the purpose of the certification. You do not send all low-income certification requests to a central IRS office; instead, they are directed to the specific program you are trying to access.
For individuals seeking assistance from a Low Income Taxpayer Clinic, the completed Form 13614-C and all supporting financial documents are submitted directly to the LITC you wish to work with. These clinics are independent organizations, often housed at universities or non-profits, that receive grants from the IRS. Each clinic has its own intake procedure, so you should contact the specific clinic for their preferred submission method.
If you are seeking a waiver of the application fee for an Offer in Compromise, the process is different. The completed Form 656-A must be included as part of the entire Offer in Compromise package. This package, which includes the main Form 656 and detailed financial statements on Form 433-A (OIC), is mailed to one of two centralized IRS locations depending on your state of residence. The correct mailing address is provided in the instructions for Form 656.
An LITC will contact you to confirm receipt of your application and inform you whether you qualify for their services based on the information provided. For an Offer in Compromise fee waiver, the IRS will process your Form 656-A along with your main offer. If your waiver is approved, the IRS will proceed with evaluating your offer without requiring the standard application fee.