Income Verification Letter

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Income verification letters are also referred to as salary verification letters, employment verification letters, proof of income (or salary) form, or income verification requests. This legal document is most often used as part of home buying or renting procedures, requests for loans, or finding a new job.


Basics

Banks, property management companies, and others who request income verification letters need specific documents like pay stubs to prove that you work at the company you say you do, and that you make a certain, stable amount of money. However, pay stubs are not the only documents that can be used to verify your income, especially if you are a small business owner, freelancer, or self-employed.

If you receive income from Social Security due to retirement or disability, then the Social Security Administration can provide you with a benefits statement rather than an income verification letter. If you are self-employed, you may need to provide more proof of income instead of a letter and two to six months’ of pay stubs.

How is an Income Verification Letter Used?

Income verification letters are most often used to prove that you make the amount of money you claim, which means you will be able to repay a loan, pay monthly rent on an apartment, or have specific salary requirements when changing jobs.

Banks use income verification letters to prove that the person applying for a loan, mortgage, or even just bank account has stable, verifiable income for two to six months.

Credit card agencies may ask for the same proof of income if you have a low credit score, but often these agencies have a different procedure, or you can discuss obtaining a credit card through your bank.

Potential employers may ask for salary information or an income verification letter simply to prove that you work at the company you claimed, and that your employer is willing to verify your information so that you may potentially change jobs.

If you need to apply for federal benefits, such as unemployment or Medicaid, then the government agency will ask you for income verification to prove that you meet certain income requirements.

Large purchases that require installment payments or loans – from homes, to cars, to television sets – sometimes ask for income verification letters to prove that you can make timely payments.

Elements of an Income Verification Letter:

When writing an income verification letter, it is very important to include the following information:
1. Name, address, and registration of employer (and perhaps yourself)
2. The date
3. Company name and/or job description
4. Salary or compensation
5. Work hours
6. Any additional compensation from other projects, especially if you are self-employed
7. Start and end date of hire (end date only if applicable – if still employed, you can include “to present”)
8. Full year-to-date earnings, from all forms of employment
9. Copies of pay stubs, tax forms, W-2 or 1099 agreements, contracts that state income, and/or profit and loss statements (especially for self-employed persons or small business owners).
You may also summarize how you plan to sustain your income in the future – for example, you plan to maintain your current job or request a raise, or you will continue to hire out your services in a specific manner or to specific clients.

Our sample income verification letter can get you started!

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