LIHTC (Tax Credits)
A low-income housing tax credit is a dollar-for-dollar credit against the federal income tax liability of the owner (developer or investor) of a low-income housing development. Tax credits that are allocated to a development are claimed in equal amounts for a 10-year period. The rental property generating the credit must remain in compliance with the program guidelines and rent restriction requirements for a period of not less than 30 years from the first taxable year of the credit period.
How Tax Credits Work
The amount of tax credits available for allocation each year by NIFA is established pursuant to certain requirements of the Internal Revenue Code. Tax Credits are awarded for specific developments pursuant to NIFA's Low-Income Housing Tax Credit Program Qualified Allocation Plan. Tax credits must be allocated by NIFA to a specific development in order for such credits to be claimed by the developer or investor. The procedures followed by NIFA in awarding credits are described in the current Qualified Allocation Plan.