Permanent Enhancement of Low-Income Housing Tax Credit
Section 70422 · Sec. 70422 ·
What this chapter is about
This part makes a raise in the state housing credit ceiling permanent. The multiplier is set at 1.12. It also lets a building qualify with 25 percent bond financing, down from 50 percent. The changes start after December 31, 2025.
“by striking "2018, 2019, 2020, and 2021," and inserting "beginning after December 31, 2025,",”
The section amends section 42(h)(3)(I) of the Internal Revenue Code of 1986 by replacing the list of years 2018 through 2021 with calendar years beginning after December 31, 2025, by striking 1.125 and inserting 1.12, and by making the matching change in the heading.
What the document actually says
“by striking "2018, 2019, 2020, and 2021," and inserting "beginning after December 31, 2025,",”
That sentence, in plain words
A short list of years is taken out. Words covering every year after December 31, 2025 are put in.
What this is about
So the raise carries on with no end year. The multiplier moves from 1.125 to 1.12. The heading is reworded to match.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall not”Who acts: Secretary of the TreasuryHow: statuteSec. 70422 in the PDF
What the document says
“25 percent or more of the aggregate basis of such building and the land on which the building is located is financed by 1 or more obligations described in subparagraph (A), and”
The section strikes subparagraph (B) of section 42(h)(4) of the Internal Revenue Code of 1986 and inserts a new one under which the allocation rule does not apply to a building where at least 50 percent of the combined basis of the building and its land is financed by qualifying obligations, or where at least 25 percent is so financed and one or more of those obligations are part of an issue dated after December 31, 2025 and provide at least 5 percent of that combined basis.
What the document actually says
“25 percent or more of the aggregate basis of such building and the land on which the building is located is financed by 1 or more obligations described in subparagraph (A), and”
That sentence, in plain words
At least a quarter of the cost must come from such bonds. That covers the building and the land under it.
What this is about
The old route needed half the cost. That route still stands. The new one adds two extra tests on the bonds.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall apply”Who acts: Secretary of the TreasuryHow: statuteSec. 70422 in the PDF
What the document says
“The amendments made by this subsection shall apply to calendar years beginning after December 31, 2025.”
The section applies the ceiling change to calendar years beginning after December 31, 2025 and the bond financing change to buildings placed in service in taxable years beginning after that date. Where expenditures are treated as a separate new building under section 42(e), both the existing building and the separate new building are treated as placed in service when those expenditures are.
What the document actually says
“The amendments made by this subsection shall apply to calendar years beginning after December 31, 2025.”
That sentence, in plain words
The changes start with years that begin after December 31, 2025. Older years are left out.
What this is about
The bond change turns on when a building is put to use. Work on an old building can count as a new one. Then both share the same start date.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Each distinct thing the section does: make the State housing credit ceiling increase permanent and set the multiplier, add the 25 percent bond financing route with its conditions, and fix the two effective dates including the rule for rehabilitation expenditures.
The heading change that follows from the date substitution.
The section works by amending section 42 of the Internal Revenue Code of 1986, which is not indexed here, so how the low-income housing credit is worked out cannot be checked against anything on this site.
