Historic Rehabilitation Tax Credit
Conn. Gen. Stat. §10-416c
Description and Applicable Taxes
A tax credit administered by the Connecticut Department of Economic and Community Development (DECD) is available for the qualified rehabilitation expenditures associated with the certified rehabilitation of a certified historic structure. To be eligible for this credit, a taxpayer must file an application with DECD. No credit may be claimed until DECD issues a tax credit voucher.
The tax credit can be used to offset the taxes imposed under Chapters 207, 208, 209, 210, 211, or 212 of the Connecticut General Statutes.
Definitions
Certified historic structure means an historic property that (A) is listed individually on the National or State Register of Historic Places, or (B) is located in a district listed on the National or State Register of Historic Places, and has been certified by the State Historic Preservation Officer as contributing to the historic character of such district.
Certified rehabilitation means any rehabilitation of a certified historic structure for (A) residential use of five units or more, (B) mixed residential and nonresidential uses, or (C) nonresidential use consistent with the historic character of such property or the district in which the property is located.
Placed in service means the completion of substantial rehabilitation work that would allow for occupancy of the entire building or an identifiable portion of the building.
Qualified rehabilitation expenditures means any costs incurred for the physical construction involved in the rehabilitation of a certified historic structure, excluding: (A) the owner’s personal labor, (B) the cost of a new addition, except as required to comply with any provision of the State Building Code or the Fire Safety Code, and (C) any non-construction cost such as architectural fees, legal fees and financing fees.
Tax Credit Amount
The tax credit is equal to 25% of the total qualified rehabilitation expenditures.
The tax credit increases to 30% of the total qualified rehabilitation expenditures if the project includes a component with at least 20% of the rental units or 10% of for-sale units that qualify as affordable housing under Conn. Gen. Stat. §8-39a.
The tax credit allowed for any project shall not exceed $4.5 million.
Carryforward and Carryback Limitations
The tax credit may be carried forward for five succeeding income years following the year in which the substantially rehabilitated structure was placed in service. No carryback is allowed.
How to Apply
Applications for tax credit voucher must be made with DECD. Contact DECD at 860-256-2800 for application information.
Assignment and Transfer
Tax credits can be sold, assigned or otherwise transferred, in whole or in part, to one or more persons, provided no credit may be sold, assigned or otherwise transferred more than three times.
An assignee must claim the tax credit in the same year in which the assignor would have been eligible to claim the tax credit. An assignee may carry forward any unused portion of the tax credit as if it had incurred the qualified rehabilitation expenditure.
How to Claim the Tax Credit
The amount listed on the tax credit voucher must be entered on Form CT-1120HR, Historic Rehabilitation Tax Credit, and Form CT-1120K, Business Tax Credit Summary, and/or Form CT-207K, Insurance/Health Care Tax Credit Schedule. The holder shall retain the voucher and make it available to the Department of Revenue Services upon request.
The tax credit shall be claimed in the income year in which the rehabilitated building is placed in service. If the project is completed in phases then a pro rata portion of the tax credit is available in the year in which an identifiable portion of the rehabilitated building is placed in service.
Where to Get Additional Information
Direct inquiries to:
Connecticut Department of Economic and Community Development
State Historic Preservation Office
450 Columbus Boulevard
Hartford CT 06103
860-500-2362
Statutory and Regulatory References
Conn. Gen. Stat. §10-416c
New: January 25, 2017