Federal Low Income Housing Tax Credits
(Section 42)

Created by Congress in 1986 and made permanent by the Tax Reform Act in 1993, the Low Income Housing Tax Credit Program provides a dollar-for-dollar reduction of tax liability to encourage the creation of affordable rental housing. Additional tax savings are provided through passive losses generated by the real estate investments. The Low Income Housing Tax Credits are a permanent reduction of current and future tax liability, not a deferral.

  • Congress delegates to state housing agencies the authority to allocate a limited pool of Low Income Housing Tax Credits
  • The tax credits are claimed over a 10 year period, subject to a 15-year compliance period

State Low Income Housing Tax Credits — Georgia

Georgia State Housing Tax Credits were created by the State of Georgia, as an enhancement to the Federal Low Income Housing Tax Credit Program for the purpose of providing additional capital for the development of affordable housing in the state of Georgia. The Georgia credit may be taken against Georgia income tax. The Georgia credit is received over the same term as the Section 42 credit. The Georgia State Housing Credit is bifurcated from the federal credit and thus only state tax benefits are derived from the program.