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Congressman Christopher Gibson and Tom Reed of New York recently introduced H.R. 3769, the Irene and Lee Tax Relief Storm Recovery Act. If the bill passes, states that were hit last year by Hurricane Irene or Tropical Storm Lee may receive disaster rebuilding assistance in the form of increased low-income housing tax credit (LIHTC) caps.
The bill would raise the LIHTC ceiling of each state that includes any portion of the Irene-Lee disaster area for calendar years 2012 through 2014. The 10 flood-damaged states would get an additional 50 percent of their annual LIHTC allocation.
On Dec. 23, 2011, the IRS issued temporary and proposed rules regarding the tax treatment of costs incurred in acquiring, maintaining, and improving tangible property, including multifamily buildings. The 255 pages of new regulations, published in the Federal Register, are temporary, meaning the IRS can edit the rules if sufficiently persuaded by the business community. However, despite being issued in temporary and proposed form, the regulations are effective as of Jan. 1, 2012, and currently have the same force as a final regulation.
In December, a group of lawmakers in the House and Senate introduced legislation to make permanent the 9 percent tax credit percentage floor for the low-income housing tax credit (LIHTC).
Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012, the Social Security Administration recently announced
The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012.
Information about Medicare changes for 2012 haven't been announced yet. For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.
Recently, the Missouri House rejected an attempt to end tax credits for the developers of low-income housing and historic buildings. House members defeated an amendment to an economic development bill that would have placed a July 2018 expiration date on the two programs. Instead, they adopted an amendment allowing lawmakers to consider a measure in 2016 that would prohibit the tax credits.
The IRS recently published the amounts of unused low-income housing tax credit carryovers for calendar year 2011. Revenue Procedure 2011-57 details how nearly $3.66 million of unused LIHTCs were divided among the eligible states in the national pool. States qualify for the national pool if they have allocated all their housing tax credits in a calendar year and request to receive an allocation of additional LIHTCs left over by other states.
On Dec. 1, HUD released income limits for 2012. Under the Housing and Economic Recovery Act of 2008 (HERA), income limits are used to determine qualification levels as well as set maximum rental rates for projects funded with low-income housing tax credits and projects financed with tax-exempt housing bonds. These projects are referred to by HUD as Multifamily Tax Subsidy Projects (MTSPs) and are calculated and presented separately from the Section 8 income limits.
On Oct. 20, the IRS released the inflation-adjusted low-income housing tax credit and private activity bond caps for 2012. For calendar year 2012, the amount used to calculate a state's LIHTC is the greater of $2.20 per resident or $2,525,000. This represents a 5 cent per-capita increase. This year, the ceiling was fixed at $2.15 multiplied by the state population, or $2,465,000.
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