Access the latest Washington Report: Read More

IRS Extends Housing Credit and Bond Deadlines, Provides Other Guidance on COVID-19

Published on July 1, 2020 by James Tassos
IRS Extends Housing Credit and Bond Deadlines, Provides Other Guidance on COVID-19

On July 1, the Internal Revenue Service published Notice 2020-53 providing temporary relief to owners and residents of Housing Credit and tax-exempt bond financed developments in response to the COVID-19 pandemic. The notice provides relief to agencies that administer the Housing Credit and tax-exempt bond programs and addresses nearly all of the issues raised in the letter NCSHA sent to IRS in March requesting COVID-19 relief. The guidance is effective immediately. Specific provisions of the notice include:

  • Extending the deadline for an owner of a building with a carryover allocation to meet the 10 percent test to December 31, 2020, if the original deadline was on or after April 1, 2020, and before December 31, 2020;
  • Extending the minimum rehabilitation expenditure period to December 31, 2020, if the original 24-month period ended on or after April 1, 2020, and before December 31, 2020;
  • Extending the reasonable restoration period in the event of casualty loss or prior major disaster to December 31, 2020, if the original deadline was on or after April 1, 2020, and before December 31, 2020;
  • Extending the transition period to meet the tax-exempt bond set-aside to December 31, 2020, if the original 12-month period ended on or after April 1, 2020, and before December 31, 2020;
  • Extending the tax-exempt bond rehabilitation expenditure period to December 31, 2020, if the original two-year period ended on or after April 1, 2020, and before December 31, 2020;
  • Suspending the owner requirement to perform tenant income recertifications for the period beginning April 1, 2020, and ending December 31, 2020;
  • Suspending the Housing Credit allocating agency requirement to conduct compliance monitoring inspections or reviews for the period beginning April 1, 2020, and ending December 31, 2020;
  • Allowing temporary closure of property amenities or common areas during the period from April 1, 2020, to December 31, 2020, in response to the COVID-19 pandemic without resulting in a reduction of the eligible basis of the building; and
  • Allowing medical personnel or other essential workers providing services during the COVID-19 pandemic to temporarily occupy Housing Credit units in accordance with the emergency housing provisions of IRS Revenue Procedures 2014-49 and 2014-50.

While the notice does not address extension of the placed-in-service deadline or the noncompliance corrective action period as suggested by NCSHA in March, we will continue to press for additional IRS guidance on these issues.