Details of Public Law 116-260, section 305 , Low-Income Housing Tax Credit

The provision increases, for calendar years 2021 and 2022, the credit allocation ceiling for buildings located in any qualified disaster zone, defined as that portion of any qualified disaster area which was determined by the President during the period beginning on 1/1/2020, and ending on the date which is 60 days after 12/27/2020.

For 2021, the increase is equal to the “applicable dollar limitation,” which is the lesser of $3.50 multiplied by the population residing in a qualified disaster zone, or 65 percent of the state’s overall credit allocation authority for calendar year 2020. For 2022, the increase is equal to the “applicable dollar limitation” reduced by the amount of any increase in the credit allocation authority from 2021. Buildings impacted by this provision will also be granted a one-year extension of the placed in service deadline and the 10 percent test.