The Internal Revenue Service issued Notice 2021-12 on January 15, 2021 to grant relief and to extend deadlines for various Low-Income Housing Tax Credit requirements. Here is a summary of the relief and extensions.
Operational relief for the period from April 1, 2020 to September 30, 2021:
- Building owners are not required to perform income re-certifications. Owner must resume re-certifications no later than October 1, 2021.
- State housing credit agencies are not required to conduct compliance monitoring inspections or reviews.
- State housing credit agencies may satisfy their Qualified Allocation Plan public comment requirements through telephone hearings rather than in-person meetings.
- The temporary closure of property amenities and common space facilities in response to COVID-19 pandemic will not result in a reduction of eligible basis and a loss of credits.
- LIHTC properties may be used temporarily to provide emergency housing for medical personnel and other essential workers providing services during the COVID-19 pandemic regardless of income eligibility.
Extension of following deadlines falling between April 1, 2020 and September 29, 2021:
- Carryover allocation 10% test extended to the earlier of one year from the original due date or September 30, 2021.
- Placed in service date for buildings with original deadline of December 31, 2020 extended to December 31, 2021.
- End date for the 24-month minimum rehabilitation expenditure period extended to the earlier of one year from the original date or September 30, 2021.
- Reasonable period for property restoration or replacement in the event of a casualty loss extended to the earlier of one year from the original end date or December 31, 2021. The IRS notice indicates that the state housing agency can decide to shorten or to not give an extension.
- Noncompliance corrective action period extended by one year, but not beyond December 31, 2021. The IRS notice indicates that the state housing agency can decide to shorten or to not give an extension.
- For first year credit periods ending between April 1, 2020 and June 30, 2021, the calculation of the qualified basis at the end of the first credit year is temporarily modified so that the calculation includes any increase in the number of low-income units by the close of the 6-month period following the close of that first year.
Regarding that last bullet point, we are working on a more detailed blog to be published shortly. Stay posted.
If you have any questions, please contact us at info@lvhj.com or your engagement lead member directly.