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The Treasury Department and Internal Revenue Service (IRS) issued guidance on January 15 providing relief from certain requirements under the Low-Income Housing Tax Credit and bonds for qualified residential rental projects. Acting to assist taxpayers negatively impacted by the ongoing COVID-19 pandemic, the guidance, among other provisions:
- Extends by 6 months the deadline to satisfy occupancy obligations for a building with a first-year credit period closing between on or after April 1, 2020, and on or before June 30, 2021.
- Extends the last day for an owner with a deadline on or after April 1, 2020, and before September 30, 2021, with a carryover allocation to meet the 10-percent test to the earlier of one year from the original due date or September 30, 2021.
- Extends the 24-month minimum rehabilitation expenditure period to the earlier of one year from the original end date or September 30, 2021, for a taxpayer whose original period ended on or after April 1, 2020, and before September 30, 2021.
- Extends to December 31, 2021, the deadline to place in service a building that previously had to be placed in service at the close of calendar year 2020.
- Provides relief from income recertifications and compliance monitoring. Under the guidance, owners must resume income certifications and Housing Finance Agencies must restart compliance monitoring not later than October 1, 2021.
- Clarifies that if common areas and amenities are closed or unavailable due to COVID-19 during some or all of the period between April 1, 2020, and September 30, 2021, eligible basis is not reduced.
