Since the inception of the Low Income Housing Tax Credit or LIHTC in 1986, more than 2 million affordable units have been developed or preserved across the United States.
Qualifying Developments – In order to qualify for the Georgia low income housing credit, the qualified Georgia project must be eligible for the federal housing credit, as defined in Section 42 of the IRC of 1986.
Credit Stream – The credits are earned by the development over a 10 year period.
Recapture – There is a 15 year compliance period for all properties. Credits already claimed may be subject to recapture of 1/3 of the value depending on the time period the recapture event occurs.
Carryforward – Unused state credits may be carried forward for up to 3 years.
Transferability – Taxpayers must be invested in a partnership that will be allocated tax credits before the end of the year the taxpayer will claim the credit for. The credits will be transferred using a K-1. Partnership K-1s may not be received from investors until September 15 of the subsequent year.
Claiming the Credit – A partnership K-1(if claiming the credit as a flow through from a partnership), the associated Federal Form 8609 tax credit certificate and a schedule that includes each property for which a credit is claimed with a building-by building allocation should be submitted with the tax return. Form IT-HC will also be used to claim the credit. The credit can be used to offset GA state income tax and GA premium tax.
Interested in learning more about Georgia’s Low Income Housing Credit?