Income as reported to Credit Company

[Anonymous]

When applying for a credit card or when updating a current credit card, are you only allowed to put in taxable income that you personally received from working?

Or can non-taxable household income be considered? Like gifts or non taxable allowance or perhaps someone elses income if you have access to their bank accounts (like as a joint acount holder?)

[FinStar]

Hello @Anonymous and welcome to the forums.

Each lender will have slight variations of what sources of income are acceptable.  Whenever you get any of these prompts, whether it's an application for credit or updating this info on an existing account, be sure to read the disclosure of what is acceptable to ensure the correct income information is captured for your specific situation.

[Anonymous]

In my particular case, I am a female over the age of 21. I live with elderly parent, I am joint account holder on fathers accounts and he is joint account holder on my account. I have full and reasonable access. We share a household and address.

Can the income he receives  count toward income requirement on credit card in my name?

Further do you know what American Express's requirement is?

[K-in-Boston]

Typically, household income would be a person and their spouse or domestic partner.  I would not include a parent, even if for instance I was a caretaker and had complete access to their finances.  If you have full and reasonably expected access to joint assets in a deposit account, that would be allowable if the lender provides a separate entry for assets.

For American Express, if asked to provide proof of income it will almost always be in the form of an IRS 4506-T request for tax transcripts from the two most recent available tax years (2018 and 2019 currently).  For American Express in particular I would not include any income that is not included in your tax filings.

[Anonymous]

in this case, i was asked to update a current american express card.  I had used my fathers income as described above when applying. I have used the card in this way for over 10 years and the card does not carry a balance.

Is there any reason I should be concerned about this? Should I cancel card or am I risking myself by leaving the card open with this income information?

btw: I was never asked what the income comes from, and if non-taxed means are allowed as per the credit act of 2009, it feels like my issue is a grey area.

[K-in-Boston]

Keep in mind that the initial purpose of that provision was for non-working spouses, so each lender will have different things they may consider above that.  Non-taxable income would generally be alimony, child support, and retirement income that you receive.

I wouldn't see any reason you would need to close the account.

[Anonymous]

Thank you, so household income is not the same as taxable income? I was more concerned about filing taxes. When the 1040 reports only taxable income which is significantly lower than the  household income reported to the credit card company. Would that raise a flag to the irs if they were to review my return? I dont want to get in IRS trouble because of this issue/descrepency.

[dragontears]

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@Anonymous wrote:

Thank you, so household income is not the same as taxable income? I was more concerned about filing taxes. When the 1040 reports only taxable income which is significantly lower than the  household income reported to the credit card company. Would that raise a flag to the irs if they were to review my return? I dont want to get in IRS trouble because of this issue/descrepency.

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No credit card company or any other kind of lender tells the IRS what you listed as income. 

[Brian_Earl_Spilner]

When I spoke to an amex underwriter, they said household income is a spouse or domestic partner and that you didn't have to have direct access to their banking accounts. Whether or not that was just their own standards versus company protocol, I couldn't tell you.

[Anonymous]

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@dragontears wrote:

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@Anonymous wrote:

Thank you, so household income is not the same as taxable income? I was more concerned about filing taxes. When the 1040 reports only taxable income which is significantly lower than the  household income reported to the credit card company. Would that raise a flag to the irs if they were to review my return? I dont want to get in IRS trouble because of this issue/descrepency.

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No credit card company or any other kind of lender tells the IRS what you listed as income. 

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This!   The risk is just with the credit card company.  If they ask for proof of income, which in some cases is going to be a request for the IRS tax transcript, and the income reported to the IRS differs greatly from what you told the credit company, then they might decide to close the account.