Congressional Leaders Submit Letter to Treasury Requesting User-Friendly Final Regulations for LIHTC Average Income Test
Sens. Michael Bennet, D-Colorado, and Todd Young, R-Indiana, led a bipartisan group of nine Congressional leaders to submit a letter to the U.S. Department of the Treasury and the Internal Revenue Service (IRS) requesting the finalization of the average income test rule for the low-income housing tax credit (LIHTC) incentive. The letter urges Treasury and the IRS to ensure that the final rule is user-friendly to support the expansion of affordable housing. The average income test was created in 2018 to enable LIHTC properties to serve residents with a wider range of incomes, but since proposed regulations for the test were released in 2020, the option has rarely been used. President Joe Biden announced earlier this month that the IRS would finalize the income average rule by the end of September. Other signees to the letter were Sens. Rob Portman, R-Ohio, Ron Wyden, D-Oregon and Mike Crapo, R-Idaho; and Reps. Suzan DelBene, D-Washington, Jackie Walorski, R-Indiana, Donald Beyer, D-Virginia, and Richard Neal, D-Massachusetts. Wyden is chair of the Senate Finance Committee and Crapo is the ranking member; Neal is chair of the House Ways and Means Committee.
The Novogradac Introduction to Low-Income Housing Tax Credits booklet provides a background on the LIHTC, including the average income test.