Avoid Tax Credit Recapture When Permitting Employee-Occupied Units

Many tax credit sites permit a resident manager, superintendent, or similar site-level employee to occupy a unit. This arrangement may raise a red flag to state auditors if the unit is not being used as permitted in the original allocation agreement with the state. Operating in the dark with regard to an employee unit can cause the owner to lose the tax credits on the unit and possibly result in tax credit recapture as far back as the first year of the compliance period.