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Low Income Housing Tax Credit (LIHTC)

Learn about the tax credit for taxpayers who invest in a low income housing project.

Overview

The LIHTC is available to:

  • Individual taxpayers
  • Partnerships
  • Corporations.

To qualify, the taxpayers must invest in a qualified low-income housing project located in Massachusetts.

The current yearly cap is $10,000,000. The Department of Housing and Community Development (DHCD) determines which:

  • Low-income housing projects will qualify for the credit
  • Properties may generate a LIHTC for investors.

DHCD also prepares an annual allocation plan and publishes a Notice of Funding Availability (NOFA) for use by a developer interested in applying for qualification.

Eligibility

Properties must meet the federal law requirements for “qualified low-income housing projects” to be eligible for the credit.

Properties must:

  • Be located in Massachusetts
  • Meet the requirements established by Massachusetts laws
  • Be owned by an owner who enters into a regulatory agreement with DHCD

Minimum Excise, Carryover, Transfer and Recapture

The LIHTC may not reduce the corporate excise due below the minimum excise, currently $456.

Any unused credits may be carried forward for next 5 tax years. Alternately, unused credits may be transferred.

If an event or circumstance occurs that results, or would have resulted, in the recapture of any portion of a federal Low Income Housing Credit, then the Massachusetts LIHTC may also be subject to recapture.

Additional information

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