Legislative Language: 9 Percent LIHTC Floor Extension

Published by Michael Novogradac on Monday, September 24, 2012 - 12:00am

I have been getting a lot of questions about the statutory language passed by the Senate Finance Committee to extend the 9 percent low-income housing tax credit (LIHTC) credit percentage floor. So here it is.

Bill Language

As proposed in S. 3521 Family and Business Tax Cut Certainty Act of 2012:

“SEC. 202. EXTENSION OF TEMPORARY MINIMUM LOW-INCOME TAX CREDIT RATE FOR NON-FEDERALLY SUBSIDIZED NEW BUILDINGS. 

(a) IN GENERAL.—Subparagraph (A) of section 42(b)(2) is amended by striking ‘‘and before December 31, 2013’’ and inserting ‘‘with respect to housing credit dollar amount allocations made before January 1, 2014’’.

(b) EFFECTIVE DATE.—The amendment made by this section shall take effect on the date of the enactment of this Act.”

Current Law

Internal Revenue Code Section 42:

(2) Temporary minimum credit rate for non-federally subsidized new buildings.

In the case of any new building—
(A) which is placed in service by the taxpayer after the date of the enactment of this paragraph and before December 31, 2013, and
(B) which is not federally subsidized for the taxable year, the applicable percentage shall not be less than 9 percent.

Proposed Law (added language in italics)

(2) Temporary minimum credit rate for non-federally subsidized new buildings.

In the case of any new building—
(A) which is placed in service by the taxpayer after the date of the enactment of this paragraph and before December 31, 2013 with respect to housing credit dollar amount allocations made before January 1, 2014, and
(B) which is not federally subsidized for the taxable year, the applicable percentage shall not be less than 9 percent.