![]() ![]() The 2018 Act added section 42(g)(1)(C) to provide a third minimum set-aside test that a taxpayer may elect with respect to a low-income housing project-the average income test. Under the 40-60 test, at least 40% of the residential units in the project must be both rent-restricted and occupied by tenants whose gross income is 60% or less of AMGI.Under the 20-50 test, at least 20% of the residential units in the project must be both rent-restricted and occupied by tenants whose gross income is 50% or less of the area median gross income (AMGI).These are known as the 20-50 test and the 40-60 test. 115-141), section 42(g) set forth two minimum set-aside tests that a taxpayer may elect with respect to a low-income housing project. The proposed regulations will be published in the Federal Register on October 12, 2022, and comments are due 60 days after publication of the proposed regulations in the Federal Register.īefore the Consolidated Appropriations Act of 2018 (Pub. The text of the temporary regulations also serves as the text of a notice of proposed rulemaking (REG–113068-22) also issued today. The final and temporary regulations will be published in the Federal Register on October 12, 2022. 9967 also includes temporary regulations containing recordkeeping and reporting requirements that are needed to facilitate administrability of, and compliance with, changes made in the final regulations. The revisions in the final regulations attempt to provide more flexibility for meeting the average income test than had been available under the proposed regulations and generally attempt to limit the impact of one unit’s noncompliance on the ability of a project to satisfy the average income test. Today’s final regulations adopt the proposed regulations as modified after consideration of the comments received and the testimony provided. Read TaxNewsFlashĪccording to the preamble, the Treasury Department and the IRS received 98 comments on the proposed regulations and 15 taxpayers provided testimony at a public hearing held on March 24, 2021. The final and temporary regulations (18 pages as published in the Federal Register on October 12, 2022) finalize regulations that were proposed in October 2020. 9967) setting forth guidance on the “average income test” under section 42(g)(1)(C) for purposes of the low-income housing credit. Treasury Department and IRS today released for publication in the Federal Register final and temporary regulations (T.D. ![]()
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