IRS Issues Notice Providing More Precise Reference for Previous COVID-19 Occupancy Obligations Relief
The Internal Revenue Service (IRS) issued a notice that will be included in the April 5 Internal Revenue Bulletin, providing a more precise reference citation for a section of previous guidance that provided COVID-19 relief and clarifying how increases in qualified occupancy six months after year-end affect the ability to claim low-income housing tax credits (LIHTCs). Notice 2021-17 specifically cites IRC Section 42(f)(3)(A)(ii) in a provision of Notice 2021-12 that provided an extension for LIHTC properties to satisfy occupancy obligations. In Notice 2021-12, the IRS merely cited IRC Section 42(f). The new notice citation clarifies that increases in qualified occupancy six months after year-end help property owners avoid two-thirds LIHTCs in the future, but cannot be used to claim additional LIHTCs in the first year.
A Notes from Novogradac blogpost in January provided analysis of Notice 2021-12.