Accredited Investor Income Test: $200,000 Alone or $300,000 Joint
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You meet the income test for an accredited investor if you earned more than $200,000 on your own, or more than $300,000 together with a spouse or spousal equivalent, in each of the last two years, and you reasonably expect the same this year. Both years have to clear the bar, and the expectation for the current year has to be reasonable.
If you are the sponsor, we built DoorRaise to run the accreditation step for every investor. If you are an investor, use this guide to see where you stand, then take the quick accredited check.
What are the income thresholds?
The rule is 17 CFR 230.501(a)(6). You qualify if you had:
| Situation | Threshold, each of the last two years |
|---|---|
| Individual income | More than $200,000 |
| Joint income with a spouse or spousal equivalent | More than $300,000 |
| Current year | Reasonable expectation of reaching the same level |
A "spousal equivalent" is a cohabitant occupying a relationship generally equivalent to a spouse. The SEC added that term in 2020.
What counts as income?
For verification, the SEC rule points to Internal Revenue Service forms that report income: Forms W-2, 1099, Schedule K-1 and a filed Form 1040. In practice, sponsors look at adjusted gross income for the two years and the document that shows it. A few points that surprise people:
- Rental and partnership income can count if it shows up in the income reported on the return.
- Capital gains are reported income in the year realized. A one-time gain can lift one year above the line, but you need both years above it.
- Spousal income can be added only for the joint test. If you invest under the individual test, use your own income.
- Tax-exempt interest and other items outside the form may or may not be included depending on how the sponsor or verifier measures. Ask which figure they use.
Worked example
These figures are made up for illustration only.
| Topic | Year 1 | Year 2 | This year (expected) |
|---|---|---|---|
| Partner A | $180,000 | $190,000 | $195,000 |
| Partner B | $140,000 | $150,000 | $155,000 |
| Joint | $320,000 | $340,000 | $350,000 |
Neither partner alone clears $200,000 in any year. Together they clear $300,000 in both years and expect to do so again, so they meet the joint test. If Year 1 had been $285,000 jointly, they would not qualify on income that year, even though Year 2 and this year are higher.
How is the income test verified?
In a Rule 506(c) offering the sponsor must take reasonable steps. For income, the rule names a document route: IRS forms reporting your income for the two most recent years, plus a written statement that you reasonably expect to reach the level this year. For a joint claim, both spouses' forms apply. A letter from a registered broker-dealer, SEC-registered adviser, licensed attorney or CPA that confirms the person was accredited within the prior three months can also work. See the CPA letter and verification methods.
In a Rule 506(b) deal, the rule does not prescribe verification. Sponsors still need a reasonable belief and usually collect a signed questionnaire. See the accredited investor questionnaire.
Income test or net worth test?
Many people can use either. Pick the one you can document most easily.
| If you... | Consider |
|---|---|
| Have steady high W-2 income but a large mortgage | Income test |
| Have modest income now but a large portfolio | Net worth test |
| Hold a Series 7, 65 or 82 license in good standing | The professional certification route |
| Invest through an LLC or trust | Entity requirements |
Common mistakes
- Using this year's expected income for all three years.
- Adding a partner's income when you are not married and have no spousal equivalent relationship.
- Counting gross revenue from a business instead of the income that appears on the return.
- Forgetting that a promotion or bonus in one year does not fix a low earlier year.
- Gathering the wrong papers. Ask which documents the sponsor accepts before you pull them.
Frequently asked questions
Do I need to hit the income test every year to stay accredited?
No. Accredited status is checked at the time you invest. Another investment later is checked again.
Is the $300,000 test only for married couples?
It is for a person together with a spouse or spousal equivalent. The rule does not require the investment to be made jointly.
Does retirement income count?
Income reported on the forms the verifier uses can count. Ask the sponsor which documents show it.
Can I qualify if my income dipped one year?
Not on income for that investment, because both years must clear the line. You may still qualify on net worth or another route.
Does being accredited mean the deal is right for me?
No. It means you are eligible to be offered a private placement. Read the documents and use a due diligence checklist.
Sources
- 17 CFR 230.501, Definitions and terms used in Regulation D (Cornell LII)
- SEC, Accredited investors
- SEC, General solicitation and Rule 506(c)
- SEC, Amendments to the accredited investor definition: compliance guide
The example is simplified and illustrative, not a projection. This article is general information as of November 2026, not legal, tax or investment advice. Talk to a securities attorney and a CPA about your situation. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.