IRS Announces 2021 LIHTC, Bond Caps

The Internal Revenue Service has announced an increase in the private-activity bond volume cap while the low-income housing tax credit (LIHTC) multiplier will remain the same in 2021. The multiplier is $2.8125, which is multiplied by a state’s population to determine the volume of 9 percent credits the state will have. The amounts used to calculate the state credit ceiling ultimately for 9 percent LIHTCs will be the greater of the multiplier amount or $3,245,625. While there is no change to the multiplier, the small state minimum has increased $28,125 from $3,217,500 this year.

According to Revenue Procedure 2020-54, for private-activity bonds, the amounts used to calculate the state ceiling next year is the greater of $110 multiplied by the state population or $324,995,000. This an increase of $5 in the multiplier and more than the $321,775,000 minimum in 2020, which means more bonds will be available in all states.