LOW INCOME HOUSING TAX CREDIT PROGRAM BASICS WITH COMPLETE SOLUTIONS

LOW INCOME HOUSING TAX CREDIT
PROGRAM BASICS WITH COMPLETE
SOLUTIONS
Low-income housing tax credit (LIHTC) - ANSWER-Capital subsidy for affordable rental
housing

LIHTC benefits for owners - ANSWER-Dollar-for-dollar reduction in federal tax liability

LIHTC benefits for PHAs - ANSWER-Funds obtained by selling tax credits for housing
goals

MSA election eligibility - ANSWER-Projects after March 23, 2018, on Form 8609

Unit designations for AIT MSA - ANSWER-20%, 30%, 40%, 50%, 60%, 70%, 80%

Changing unit designation - ANSWER-Record in books, inform state allocating agency

Prorata share amount for bedroom sizes - ANSWER-State-specific requirement for unit
designation

IRS allocation of tax credits - ANSWER-Based on amount invested in affordable
housing

Placed-in-service date - ANSWER-Date when housing is available for occupancy

Minimum set aside - ANSWER-Requirement for affordable housing on project level

Key regulatory documents - ANSWER-Documents governing LIHTC program
compliance

Compliance time periods - ANSWER-Specific periods for meeting LIHTC program
requirements

Tax credits - ANSWER-Subtracted directly from tax liability

Tax deductions - ANSWER-Subtracted from total income to compute tax base

Receipt of LIHTC allocation by PHA - ANSWER-PHA benefits by selling credits for
upfront funds