Baltimore’s Water4All Affordability Credits Are Excluded from Income, Treasury Dept Finds

Advocates Applaud Sen. Van Hollen, Biden Administration for Letter Clarifying Water Affordability Assistance Is Excluded from Income

Published Feb 28, 2023


Clean Water

Advocates Applaud Sen. Van Hollen, Biden Administration for Letter Clarifying Water Affordability Assistance Is Excluded from Income

Advocates Applaud Sen. Van Hollen, Biden Administration for Letter Clarifying Water Affordability Assistance Is Excluded from Income

Baltimore, MD —  Hundreds, if not thousands, of low-income Baltimoreans stand to benefit from water bill assistance, thanks to new guidance from the U.S. Department of Treasury. 

After advocacy from the Baltimore Right to Water Coalition and an inquiry from Sen. Chris Van Hollen, the Treasury Department on Friday clarified that the benefits from Baltimore’s Water4All program are not taxable, removing a key barrier to participation.

On Friday, the U.S. Department of Treasury responded to an inquiry from Sen. Chris Van Hollen to clarify that benefits to tenants received under Baltimore’s Water4All program are excludable from a household’s gross income under the general welfare exclusion. Advocates in the Baltimore Right to Water Coalition have sought a solution for this issue for more than a year. 

Last February, the Baltimore City Department of Public Works launched the Water4All affordability program, as part of the implementation of the City’s Water Accountability and Equity Act. Baltimore City designed an equitable solution to ensure water affordability assistance reaches tenants in multifamily units, who rarely have access to water assistance because they share a centralized water meter and are not individual direct customers of a water utility. The city provides the assistance directly to tenants in multifamily units on prepaid cards to offset their water costs paid to landlords. 

Unfortunately, based on outside legal advice, the city had warned that the affordability assistance would count as income and has required W-9s from tenants to access the water affordability program. Counting this assistance as income can have cascading impacts on a low-income household, potentially jeopardizing their access to other income-qualified assistance programs or disqualifying them from subsidized housing, SNAP, social security, or disability benefits. 

Last Friday’s letter opened the door to allow hundreds, if not thousands, of city residents to access the Water4All Program. According to DPW’s monthly review, as of mid-February, more than 600 tenants have not accepted the affordability assistance. The Department has indicated in conversations that filing the W-9 is the main obstacle. The average income of households who are applying is less than $17,000 a year. 

Households can apply at 

“Access to clean water is a human right – and shouldn’t come at the expense of other basic needs. That’s why I worked to get this clarity from the Treasury Department to the Water4All Program, so that more Baltimoreans can benefit from this critical program without concerns that it will impact their taxes, housing, or other services. Working alongside the Right to Water Coalition and other local partners, we’ll keep fighting to ensure all Baltimoreans have access to clean water,” said Senator Chris Van Hollen. 

“We thank Sen. Van Hollen for his help in receiving this clarity that will expand equitable access to water affordability assistance to tenants in Baltimore City,” said Mary Grant, the Public Water for All Campaign Director at Food & Water Watch. “This guidance has removed barriers to affordable water service for low-income renting households. Baltimore City’s comprehensive water affordability program provides a model for the nation to reach tenants behind centralized meters that have been left out of traditional water assistance programs.” 

“This guidance from the IRS is a huge win for low-wealth tenants in our city, and will ensure that the Water4All program can actually meet the needs of Baltimore’s tenants,” said Rianna Eckel with Maryland Volunteer Lawyers Service. “Having the Water4All credit count as taxable income would’ve made filing taxes a nightmare, and could’ve even pushed people over the income thresholds for other assistance programs. Ensuring that water affordability credits do not count as taxable income is an economic and racial justice issue. Generally, tenants are more likely to be lower wealth and more financially destabilized than homeowners. Additionally, Black and Brown Baltimoreans are more likely to be renters. We’re grateful to Senator Van Hollen for his work to get this rectified, and look forward to working with the city to remedy this for tenants already enrolled in the Water4All program, as well as ensuring that tenants who were previously deterred from enrolling because the affordability credit would count as taxable income can be swiftly enrolled.”  

“The Water Accountability and Equity Act was passed into law to create permanent water affordability for those most financially struggling in our city – including renters,” said Molly Amster, Maryland Policy Director & Baltimore Director for Jews United for Justice. “We deeply appreciate Senator Van Hollen’s efforts to secure this IRS guidance, which we hope will lead to a shift in DPW policy. Taxing financial assistance never made sense.”

Press Contact: Peter Hart [email protected]