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Smith, Wyden Announce Tax Framework that Includes Restoration of 12.5% LIHTC Boost, Temporary Reduction of 50% Financed-By Test to 30%

Jason Smith, R-Missouri, and Ron Wyden, D-Oregon, today announced a bipartisan tax framework that includes restoring the 12.5% increase in annual 9% LIHTC allocation for 2023-2025 and a decrease in the PAB financing threshold for 4% LIHTC from 50% to 30% for 2024-25. The legislation provides a transition rule for buildings that already have bonds issued. 

WASHINGTON–Jan. 16, 2024–House Ways and Means Committee Chair Jason Smith, R-Missouri, and Senate Finance Committee Chair Ron Wyden, D-Oregon, today announced a bipartisan tax framework that includes restoring the 12.5% increase in annual 9% low-income housing tax credit (LIHTC) allocation for 2023-2025 and a decrease in the private activity bond (PAB) financing threshold for 4% LIHTC from 50% to 30% for 2024-25. The legislation provides a transition rule for buildings that already have bonds issued. The 30% financed-by provision would be effective for buildings placed in service after Dec. 31, 2023.

The announced legislation also includes extensions of research and development expensing, the restoration of depreciation and amortization in the calculation of how debt can be deducted under Section 163(j), restoration of 100% bonus depreciation and an expansion and enhancement of the child tax credit. Wyden and Smith also released a section-by-section technical summary of the Tax Relief for American Families and Workers Act of 2024. Wyden and Smith will need to find a legislative vehicle for the measure and hope to pass it by Jan. 29 to avoid disrupting tax filing season. 

Click here to read the full industry alert from Novogradac at www.novoco.com

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