A historic rehabilitation tax (HRT) credit may be available to qualifying personal income or corporate excise taxpayers that have expenditures from the rehabilitation of a historic structure.
The HRT credit is up to 20% of the taxpayer’s rehabilitation expenditures in regard to a:
- Historic structure, or
- Phase of a structure for projects completed in phases.
To qualify for the credit
You may qualify for an HRT Credit if:
- Your project or phase has received final certification from the Massachusetts Historical Commission (MHC), and
- Your project has been placed in service.
The HRT credit is allowed for the tax year in which the substantially rehabilitated property is placed in service. The definition of "placed in service" is when occupancy of the entire structure or some identifiable portion of the structure is permitted.
The authorization for the historic rehabilitation tax credit is 16 years, starting on January 1, 2006, and ending December 31, 2022. The authorization amount is capped at $50,000,000 per year.
An unused credit may be carried forward for the next 5 tax years. Alternatively, the credit is transferable, but not refundable. As a result of amendments in 2014 and 2016, credit awards also may be transferred to other qualifying taxpayers that acquire a historic structure, as long as certain criteria are met. Previously, only the credit was transferable, not a credit award.
The credit may be subject to recapture if the taxpayer disposes of its interest in the structure within 5 years of being placed in service.
For more information and important definitions: