How American Taxpayer Relief Act Affects Housing Tax Credits

On Jan. 2, President Obama signed H.R. 8, the American Taxpayer Relief Act of 2012, into law. The bill had been approved by the Senate by a vote of 89-8 and then by the House of Representatives by a vote of 257-167.

Pertaining to affordable housing, the new law extends the new markets tax credit for two years, providing a maximum annual amount of qualified equity investments of $3.5 billion each year. It also extends and modifies the fixed 9 percent low-income housing tax credit floor for LIHTC allocations made before Jan. 1, 2014. For federally subsidized 4% tax credit projects, no change was included for them in the legislation and the monthly rates will continue to fluctuate and be published by the IRS.

In addition, the package also retroactively extends the provision that the basic housing allowance of a member of the military is not considered income for purposes of calculating whether that person qualifies as a low-income tenant from Dec. 31, 2011, through Dec. 31, 2013.