Key Tax Credits Extended

After months of talks and weeks of serious negotiations over tax extenders and spending, Congress struck a pair of deals less than two weeks before Christmas that provided rare midterm certitude for several tax credits:

• The minimum 9 percent low-income housing tax credit (LIHTC) applicable percentage for federally unsubsidized developments was made permanent. However, the bill does not include a provision to establish a minimum 4 percent for LIHTC used to finance the acquisition of existing property. 

• The new markets tax credit (NMTC) was extended five years at $3.5 billion in allocation issuance authority per year through 2019. A provision that would have indexed the NMTC for inflation was rumored to be under consideration, but did not make the final bill. 

• The renewable energy investment tax credit (ITC) and production tax credit (PTC) were extended with gradual phase-downs.