U.S. Rep. Mike Carey (R-OH) has sponsored a bipartisan measure designed to improve the Low-Income Housing Tax Credit (LIHTC) program by instituting a change intended to encourage greater use of the credits and to attract more investment in the construction of affordable housing.
The congressman on May 22 introduced the Affordable Housing Credit Carryback Act, H.R. 9012, alongside lead original cosponsor U.S. Rep. Jimmy Panetta (D-CA) to change the LIHTC carryback period from one year to five years.
“Affordable housing projects depend on stable investment, but the current one-year carryback limit puts the Low-Income Housing Tax Credit at a disadvantage compared to other credits in the tax code,” Rep. Carey said. “Expanding the LIHTC carryback period to five years will provide greater certainty for investors, strengthen the housing credit market, and help support the development of more affordable housing across the country.”
By expanding the LIHTC carryback period from one year to five years, it would be brought in line with other tax credits that already receive more favorable treatment under the tax code, according to a bill summary provided by Rep. Carey’s office.
Under current law, many LIHTC investors quickly max out the amount of credit they can apply toward their annual tax liability, making other credits with longer carryback periods more attractive, the summary says.
“The lack of affordable housing continues to be one of the biggest issues for those who want to attain a cornerstone of the American dream,” said Rep. Panetta. “Although there is no silver bullet to solve our housing crisis, Congress can play its part by adjusting the tax code to enhance opportunities under the Low-Income Housing Tax Credit.”
The Affordable Housing Tax Credit Coalition supports the bill, which is under consideration by the U.S. House Ways and Means Committee.