Enter your income, medical spend, and HOTMA threshold year. See your annual deduction and monthly rent savings. Takes 30 seconds.
Use your HUD-anticipated annual income (wages + SS + pensions + cash assistance).
Include premiums, copays, prescriptions, and mileage at $0.21/mile (2026 IRS rate).
Full HOTMA threshold — applies to new households and after transition.
Get the free HUD medical expense worksheet that captures the receipts to back these numbers up.
Margaret is on Social Security. Her household qualifies (she's 68, head of household). She spent $2,400 on medical in the year: $840 prescriptions, $1,200 Medicare Part B + Medigap premiums, $180 copays, $180 mileage to dialysis appointments. Here's what the calculator returns at each threshold:
| Threshold | Threshold $ | Deduction | Annual rent savings | Monthly |
|---|---|---|---|---|
| Legacy pre-HOTMA (3%) | $540 | $1,860 | $558 | $46.50 |
| HOTMA Year 1 (5%) | $900 | $1,500 | $450 | $37.50 |
| HOTMA Year 2 (7.5%) | $1,350 | $1,050 | $315 | $26.25 |
| HOTMA Year 3+ (10%) | $1,800 | $600 | $180 | $15.00 |
Note how the same $2,400 in medical spend yields very different rent savings depending on the threshold year. As HOTMA phases up to 10%, tracking every qualifying expense becomes more important, not less.
HUD rent is calculated from your adjusted income, not your gross income. Adjusted income equals gross income minus a set of deductions HUD allows — dependent allowance, elderly/disabled allowance, medical expense deduction, and a few others. You pay 30% of adjusted income as rent.
The medical deduction equation, straight from 24 CFR 5.611:
medical_deduction = max(0, annual_medical_spend − (annual_income × threshold)) rent_savings = medical_deduction × 0.30
So every $1,000 of medical deduction lowers your rent by about $300/year, or $25/month. That's why capturing borderline expenses like Medicare Part B premiums and transportation mileage makes a meaningful difference — they push you further above the threshold and convert 1:1 into rent savings at the 30% rate.
The Housing Opportunity Through Modernization Act (Pub. L. 114-201) raised the medical threshold from 3% to 10%. Households that were already receiving the deduction under the old rule phase in over three years:
| Phase | Threshold | Who's in it |
|---|---|---|
| Legacy | 3% | Households still grandfathered at the pre-HOTMA threshold |
| HOTMA Year 1 | 5% | First year after HOTMA implementation |
| HOTMA Year 2 | 7.5% | Second year of transition |
| HOTMA Year 3+ | 10% | All new households, and all households after transition completes |
HUD follows IRS Publication 502 for what qualifies. Common categories worth tracking:
See the full HUD medical expense guide for the complete qualifying list and examples.
The number this calculator gives you is an estimate until your PHA sees proof. Every expense you claim needs documentation, and the most common reason a deduction comes back smaller than expected is a missing or non-itemized receipt rather than a disagreement about the rule. Bring, for the past 12 months:
One thing worth knowing before you go: credit card and bank statements alone are generally not accepted. A statement shows that money went to a pharmacy; it doesn't show the expense was medical or what was bought. PHAs want the itemized proof behind the charge.
Confirm with your housing authority — rules, accepted document types, and thresholds vary by PHA. The full list, with examples, is in the HUD medical expense deduction guide.
The calculator estimates your deduction. To claim it at recertification, your PHA needs receipts. Our HUD medical expense tracker scans your Gmail daily for pharmacy, clinic, and insurance receipts and drops them straight into a Google Sheet your PHA can read. Free to start.
If you'd rather track manually, the generic expense tracker template works too — just tag each row with HUD-medical to filter at recertification time.
The math follows 24 CFR 5.611 exactly: deduction = qualifying medical minus threshold (a percentage of annual income), then rent = 30% of the resulting adjusted income. It produces the same figures your PHA will calculate. Real variations come from which expenses qualify and how your PHA categorizes them — not from the formula itself.
Not necessarily — your PHA makes the final determination based on receipts you submit at recertification. This calculator estimates the deduction and rent savings assuming every expense you enter qualifies and is documented. Actual savings depend on whether your expenses meet 24 CFR 5.611 criteria.
New households starting after HOTMA implementation begin at the 10% threshold immediately. Households that were already receiving the deduction under the old 3% rule phase in over three years: 5% → 7.5% → 10%. Your PHA tracks which year you're in — ask them if unsure.
Use your HUD-anticipated annual income — the figure your PHA uses for rent calculation. For Social Security recipients, that's typically the yearly benefit. For seasonal or part-time workers, PHAs usually annualize recent months. Use the same income figure your PHA uses to avoid discrepancies.
Yes. Medicare Part B premiums (~$174.70/month in 2025, $185/month projected for 2026) count as qualifying medical expenses — that alone is over $2,000/year you may be missing. Include any Medicare Advantage, Medigap, and Part D premiums as well.
Yes — just enter that year's income and threshold. If you've been underclaiming for 1-2 years, talk to your PHA about corrections. Many PHAs will adjust rent retroactively if the under-claimed expenses were documented at the time.
HUD follows IRS Publication 502. In practice that means out-of-pocket costs for prescriptions, doctor and dental copays, vision and hearing care (including hearing-aid batteries), Medicare Part B and Part D premiums, Medigap and Medicare Advantage premiums, medical equipment such as wheelchairs, walkers, CPAP machines and glucose monitors, transportation to appointments (mileage at the IRS medical rate, plus bus, taxi and rideshare fare, parking and tolls), service-animal costs, and in-home attendant care. Anything paid out of pocket in the past 12 months for the treatment, prevention or relief of a medical condition generally counts. Only unreimbursed amounts qualify — the part an insurer paid back does not. Confirm with your housing authority, because rules and thresholds vary.
Most HUD tenants pay 30% of their adjusted income in rent. The medical deduction lowers your adjusted income, so every $1,000 of qualifying deduction reduces the income your rent is calculated on by $1,000 — about $25 a month, or $300 a year, less rent. Only the medical spending above your threshold percentage counts toward the deduction, which is why the threshold year matters so much. Your PHA makes the final determination at recertification.
No — either one qualifies the household, and only one person needs it. The deduction applies when the head of household, spouse, or co-head is elderly (62 or older) or a person with a disability. Once the household qualifies, the medical expenses of every household member count, including children and other relatives on the lease — not only those of the elderly or disabled person. This is one of the most commonly missed parts of the rule.
Not legal or financial advice. This calculator follows 24 CFR 5.611 and HOTMA (Pub. L. 114-201) but your PHA makes the final determination at recertification. Consult your housing coordinator for your specific case.