Virginia Department of Taxation Issues Amended Regulations for State LIHTC

Friday, December 2, 2022 - 9:00am

The Virginia Department of Taxation amended regulations concerning the housing opportunity tax credit, the state’s low-income housing tax credit (LIHTC). Among the amendments and clarifications are that taxpayers with unused credits can carry them forward up to five years and that the state can carry forward up to 15% of annual credits. Awardees of 9% LIHTCs can amend their application to a 4% LIHTC in connection with their points and rankings for the state credit and in doing so, change their requested federal LIHTC amount. The amended regulations prioritize 4% LIHTC developments not yet placed in service that have funding gaps. The regulations also prioritize $20 million of state LIHTCs annually for areas in areas with populations of 35,000 or fewer residents. The amendments include a clarification that awards made in 2021 are unchanged by proposed amendments for 2022.

The importance of state credits in funding will be discussed at the Novogradac 2023 Affordable Housing Developers Conference, Jan. 11-12, 2023, in Fort Lauderdale, Florida.