Sign Up For Novogradac Industry Alert Emails

Smith, Wyden Announce Tax Framework that Includes Restoration of 12.5% LIHTC Boost, Temporary Reduction of 50% Financed-By Test to 30%

Tuesday, January 16, 2024 - 9:29AM

House Ways and Means Committee Chair Jason Smith, R-Missouri, and Senate Finance Committee Chair Ron Wyden, D-Oregon, today announced a bipartisan tax framework that includes restoring the 12.5% increase in annual 9% low-income housing tax credit (LIHTC) allocation for 2023-2025 and a decrease in the private activity bond (PAB) financing threshold for 4% LIHTC from 50% to 30% for 2024-25. The legislation provides a transition rule for buildings that already have bonds issued. The 30% financed-by provision would be effective for buildings placed in service after Dec. 31, 2023. 

The announced legislation also includes extensions of research and development expensing, the restoration of depreciation and amortization in the calculation of how debt can be deducted under Section 163(j), restoration of 100% bonus depreciation and an expansion and enhancement of the child tax credit. Wyden and Smith also released a section-by-section technical summary of the Tax Relief for American Families and Workers Act of 2024. Wyden and Smith will need to find a legislative vehicle for the measure and hope to pass it by Jan. 29 to avoid disrupting tax filing season.  

The tax legislation is a topic at the Novogradac 2024 Affordable Housing Developers Conference beginning Thursday in Fort Lauderdale, Florida. Novogradac will also detail these LIHTC provisions in a future Notes from Novogradac blog.

Learn more about Novogradac's expertise and many services