Lindquist, von Husen & Joyce LLP.

  • About
    • Mission & Values
    • Leadership
    • BKR International
    • Our History
  • Services
    • Audit & Attestation
    • Tax
    • Business Advisory & Other Services
  • Expertise
    • Affordable Housing & Real Estate
      • CAS+ for Affordable Housing
    • Not-For-Profits
    • Individuals & Families
    • Closely Held Businesses
    • Client Success Stories
  • Resources
    • Blog
    • Tax Guide
  • News & Events
    • Firm News
    • Events
    • Industry News
  • Careers
    • Benefits
    • Professional Development
    • Life at LvHJ
    • Meet Our People
    • Open Positions
  • Contact
  • Client Portal

Client Portal

Forgot password?

IRS Notice 2022-05 Extends Compliance Deadlines for LIHTC Projects

January 27, 2022   |   Posted in: Tax Laws, Timely News

In response to the ongoing COVID-19 pandemic, the IRS has issued Notice 2022-05 on January 10, 2022 to extend temporary relief from certain requirements under the Internal Revenue Code (IRC) Section 42 for qualified low-income housing projects. 

For relief that was provided before this recent IRS notice, please refer to our 1/25/21 blog “IRS Notice 2021-12 Provides LIHTC Relief and Extends Deadlines.”

The IRS Notice 2022-05 is now extending previous relief for:

  • 10% test for carryover allocations
  • placed-in-service deadline
  • 24-month minimum rehabilitation period
  • reasonable period for restoration or replacement in the event of casualty loss
  • agency correction periods
  • period to satisfy occupancy obligations
  • operational relief

10% Test for Carryover Allocations

For the IRC Sec. 42(h)(1)(E)(ii) 10% test for carryover allocations, the deadline is extended to:

  • original deadline plus two years, if the original deadline was between April 1, 2020 and December 31, 2020
  • December 31, 2022, if the original deadline was between January 1, 2021 and December 30, 2022

Placed-in-Service Deadline

For the IRC Sec. 42(h)(1)(E)(i) place-in-service requirement, the new deadline to place a low-income building in service is:

  • December 31, 2022, if the original deadline was December 31, 2020
  • December 31, 2022, if the original deadline was December 31, 2021 and the original deadline for the 10% test for carryover allocations was before April 1, 2020
  • December 31, 2023, if the original deadline was December 31, 2021 and the original deadline for the 10% test for carryover allocations was between April 1, 2020 and December 31, 2020
  • December 31, 2023, if the original deadline was December 31, 2022

24-Month Minimum Rehabilitation Period

For the IRC Sec. 42(e) 24-month minimum rehabilitation expenditure period, the deadline is extended to:

  • The original date plus 18 months, if the original deadline was between April 1, 2020 and December 31, 2021
  • June 30, 2023, if the original deadline was between January 1, 2022 and June 30, 2022
  • The original date plus 12 months, if the original deadline was between July 1, 2022 and December 31, 2022
  • December 31, 2023, if the original deadline was between January 1, 2023 and December 30, 2023

Reasonable Restoration/Replacement Period

For the reasonable period for property restoration or replacement in the event of a casualty loss, if the reasonable period ended on or after April 1, 2020, then the last day of the reasonable restoration or replacement period is extended by 18 months, but no later than December 31, 2022.

Housing Agency Correction Period

For noncompliance corrective action for which the correction period set by the state housing agency ends between April 1, 2020 and December 30, 2021, the end of the correction period is extended by a year, but not beyond December 31, 2022. If the correction period originally set by the agency ends during 2022, the end of the correction period is extended to December 31, 2022.

Extension to Satisfy Occupancy Obligations

For first year credit periods ending between April 1, 2020 and December 31, 2022, the qualified basis at the end of the first credit year is calculated by taking into account any increase in the number of low-income units by the close of the six-month period following the close of that first year. Please read our blog “Extension of Temporary Relief for Late-leased Units”.

Operational Relief

Following is a summary of some of the operational relief that has been extended.

State housing credit agencies are not required to conduct compliance monitoring physical inspections in the period from April 1, 2020 to June 30, 2022. Depending on the COVID-19 transmission rate, state agencies, in consultation with public health experts, may extend the waiver for physical inspections, but such extension may not go beyond December 31, 2022.

For the period from April 1, 2020 to December 31, 2022, 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.

For the period from April 1, 2020 to December 31, 2022, 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.

If you have any questions, please contact your engagement lead member directly or email us at info@lvhj.com.

Learn more about LvHJ’s affordable housing experience.


 


Recent Posts

  • Nonprofit Financial Management – Essential Stakeholder Communication
  • Help the Homeless with Your Accounting Career
  • Hiring? You may be eligible for a valuable tax credit, the WOTC
  • Long-Term Strategies for Affordable Housing
  • These 4 Technology Trends are Shaping Future Accounting Jobs

Categories

  • Affordable Housing
  • Business Advisory Services
  • Case Studies
  • Charitable Giving
  • Individual Tax
  • Not For Profit
  • Professional Development
  • Tax Laws
  • Timely News
  • Uncategorized

Archives

  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • June 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017

Tags

179 accounting careers Affordable Housing affordable housing CPA alternate valuation date audit audit planning Blog Blog Post California California storm update Careers charitable donations CPA careers employees estate estate tax executor extension IRS isolation LIHTC major gifts May 2023 mental health nonprofit Not for Profit Professional Development San Francisco succession tax Tax Credit Compliance taxes tax expert california tax jobs tax planning tax reform tax relief tax services California transfer of assets valuation date wellness will workplace year 15 buyouts

Connect with us on

  • About
  • Services
  • Expertise
  • Resources
  • News & Events
  • Careers
  • Contact
  • Client Portal
©2023 Lindquist, von Husen & Joyce LLP. All Rights Reserved.