News Historic Tax Credit

COVID-19 Legislation Negotiations Stalled, Continued HTC Advocacy is Encouraged

Written By: NTCIC

Congressional leaders and the Trump Administration have failed to reach an agreement on the emerging COVID-19 legislation. House and Senate leadership released congressional members to go home and campaign until after Labor Day. However, members can be called back to Washington with 24 hours’ notice if a deal is struck.

Though negotiations have stalled, there is still a possibility of a deal over the next several weeks, as significant issues continue to bring political pressure on both sides of the aisle in an election year. This interim period presents a significant opportunity for historic rehab advocates to continue to reach out to their Senators to urge the inclusion of Historic Tax Credit (HTC) provisions.

In July, the Senate proposed a $1 trillion bill to address issues directly related to COVID-19, with emphasis on keeping people employed, safely reopening schools, and ensuring adequate funding for healthcare. It includes liability protections for businesses, schools and universities, charities, and frontline medical workers who comply with health guidelines.

This weekend, the House will call members back to DC to take up postal service funding legislation as the national debate on mail-in voting continues. In response, the Senate postal service funding proposal includes a “skinny” version of their COVID-19 relief bill, totaling an estimated $500 billion.

Presently, both Senate proposals do not include enhancements to the HTC. These bills are an alternative approach to the Democrats’ priorities in the COVID-19 relief negotiation. The Democrat-controlled House passed the $3 trillion HEROES Act in May and pandemic related provisions within the Moving America Forward Act (H.R. 2) in July. The H.R. 2 bill included permanent provisions of the Historic Tax Credit Growth and Opportunity Act (HTC-GO), along with a temporary measure that would increase the HTC from 20% to 30% to address pandemic related challenges for HTC projects over five years.

Contact Your Senators:

As congressional leaders work towards an agreement on the broad parameters of a COVID-19 relief bill, it is still important to contact your Senators and urge them to support the HTC. Advocates should share the specific challenges HTC projects face and why HTC enhancements, especially a temporary pandemic-related provision, would make a difference in projects. When and if a deal is struck, it will quickly move towards passage, with little time to ramp up advocacy efforts. It is vital to share pandemic related challenges and to advocate ahead of final negotiations.

Advocates should focus on Senate advocacy and look for opportunities to safely connect with legislators as they are home through Labor Day.

Contact our HTC advocacy coordinators who stand ready to help you develop your message and contact the appropriate tax staff:

You can also contact your Senators by visiting: Click the contact section or “contact me” link. Go to the message portal and, if possible, select “Tax or Taxation” as the issue area category. Additionally, you may also contact the Capitol Switchboard at 202-225-3121. Please keep in mind that most congressional staff are working remotely.

Message to Senate Offices

  • “Please include needed HTC enhancements that were in the recent House infrastructure bill (H.R. 2) to the next COVID-19 relief bill, especially a temporary provision for pandemic relief to overcome present obstacles related to onsite labor, supply chain, and regulatory and financing challenges.”
  • Describe obstacles that local HTC projects have faced during the pandemic, such as delays, extra costs incurred onsite, and project financing difficulties.
  • Explain how the HTC provisions in the House-passed infrastructure bill would help these projects, especially the temporary provision that increases the HTC from 20% to 30%.

Please share responses from Senate offices to to inform future advocacy efforts.


IRS Extends Deadline to Meet Substantial Rehabilitation Test for Claiming Historic Tax Credits

To provide additional relief to taxpayers impacted by the pandemic, the IRS recently published a notice which extends the measuring period used in satisfying the substantial rehabilitation (“sub rehab”) test requirement for the Historic Tax Credits. Projects with a 24- or 60-month measuring period ending on or after April 1st, 2020, and before March 31st, 2021, now have until March 31st, 2021, to incur sufficient qualified rehabilitation expenditures (QREs) to satisfy the sub rehab test. This extension applies to both five-year credit projects and projects which still qualify for one-year credits under the transition rule included in the Tax Cuts & Jobs Act of 2017. For more details, click here.

The IRS notice is welcome news to many projects that have experienced delays due to pandemic related complications. However, challenges remain with active projects that have seen, in many cases, devastating impacts from the COVID-19 pandemic, both onsite and in the financing realm. Please continue to reach out to your Senators to share challenges with HTC projects impacted by the pandemic.