Illinois Legislation Would Create State LIHTC with $35 Million Annual Cap

Wednesday, January 19, 2022 - 1:00pm

Legislation to create a state low-income housing tax credit (LIHTC) was introduced this week in the Illinois House of Representatives. H.B. 4596 would create the Build Illinois Home Tax Credit, which would have a statewide annual cap of $35 million, of which 75.5% would be allocated by the Illinois Housing Development Authority, with the remainder allocated by the City of Chicago Department of Housing. The credit could be taken over 10 years and carried forward five years. Any federal recapture would result in state recapture. The credit would be for taxable years after Jan. 1, 2023. Illinois currently has an affordable housing tax credit for 50% of a donation of money, securities, real estate or personal property to a nonprofit affordable housing sponsor for an affordable housing project.

The Novogradac Introduction to the Low-Income Housing Tax Credits booklet provides an introduction to the fundamentals of the LIHTC incentive, including the interaction of state and federal credits.