The CPA Journal

LOW-INCOME HOUSING CREDIT

By Seymour Taub, JD, CPA, Eisner & Lubin, New York City

A New York State Low-Income Housing Tax Credit Program was established as of January 1, 2001. A credit reducing the New York corporate franchise tax, bank franchise tax, insurance franchise tax, and personal income tax is provided to promote the construction and rehabilitation of low-income housing in New York State. The credit is available to building owners that are individuals, partners (including members of LLCs treated as partnerships for federal tax purposes), New York S corporation shareholders, estates and trusts, and beneficiaries of estates and trusts.

The program coordinates with and builds upon the Federal Low-Income Housing Credit, which is provided in IRC section 42 and requires that at least 20% of residential units are occupied by tenants whose income is 50% or less of area median gross income. The New York State credit, however, is applicable to low-income housing where tenant income is 90% or less of area median gross income. The New York State Division of Housing and Community Renewal administers both the federal and New York State credits.

The amount of credit available for each building is determined by the commissioner of the Division of Housing and Community Renewal under Article 2-A of the Public Housing Law. The credit amount allocated to a housing complex by the commissioner is determined each year for 10 years. The complex must continue to qualify as low-income housing for a 15-year compliance period to avoid a partial recapture of the credit.

Additional information is available on the Division of Housing and Community Renewal website (www.dhcr.state.ny.us).

State and Local Editor:
Stewart Buxbaum, CPA
S. Buxbaum & Company P.C.

Interstate Editor:
Nicholas Nesi, CPA
BDO Seidman LLP

Contributing Editors:
Henry Goldwasser, CPA
M.R. Weiser & Co. LLP

Steven M. Kaplan, CPA
Kahn, Hoffman, Nonenmacher & Hochman, LLP

Warren Weinstock, CPA
Marks Paneth & Shron, LLP

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The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

STATE AND LOCAL TAXATION