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Department of the Treasury
Internal Revenue Service
Instructions for Form 8609

(Rev. December 2021)
Low-Income Housing Credit Allocation and Certification

Section references are to the Internal Revenue Code unless Allocation of credit. For an owner to claim a low-income
otherwise noted. housing credit on a building (except as explained under
Tax-exempt bonds, later), the housing credit agency must
Future Developments make an allocation of the credit by the close of the calendar
For the latest information about developments related to year in which the building is placed in service, unless:
Form 8609 and its instructions, such as legislation enacted 1. The allocation is the result of an advance binding
after they were published, go to IRS.gov/Form8609. commitment by the housing credit agency made not later
What’s New than the close of the calendar year in which the building is
placed in service (see section 42(h)(1)(C));
Minimum credit rate. The Taxpayer Certainty and Disaster 2. The allocation relates to an increase in qualified basis
Tax Relief Act of 2020 set a new minimum applicable credit (see section 42(h)(1)(D));
percentage of 4% for certain buildings. See Line 2 and
Line 9a, later. 3. The allocation is made for a building placed in service
no later than the second calendar year following the calendar
Qualified disaster zones. The Taxpayer Certainty and year in which the allocation is made if the building is part of a
Disaster Tax Relief Act of 2020 extends the deadlines for project in which the taxpayer's basis as of the date which is 1
meeting the 10% and placed-in-service requirements under year after the date that the allocation was made is more than
section 42(h)(1)(E) for designated buildings located in a 10% of the project’s reasonably expected basis as of the end
qualified disaster zone. See Line 5b, and also Allocation of of that second calendar year (for certain calendar year 2021
credit under Purpose of Form, later. or 2022 allocations to buildings in qualified disaster areas
Notice 2021-12. The instructions have been updated replace "second calendar year" with "third calendar year" and
throughout, as needed, to reflect the temporary relief "1 year" with "2 years" (see your housing credit agency and
provided in Notice 2021-12, 2021-6 I.R.B. 828 (at the Taxpayer Certainty and Disaster Tax Relief Act of 2020,
IRS.gov/pub/irs-drop/n-21-12.pdf), as clarified by Notice sections 301(2) and 305(a)(3), for more information)) (also
2021-17, 2021-14 I.R.B. 984 (at IRS.gov/pub/irs-drop/ see the TIP below for other extensions); or
n-21-17.pdf), and as amended by Notice 2022-05, 2022-05 4. The allocation is made for a project that includes more
I.R.B. 457 (at IRS.gov/pub/irs-drop/n-22-05.pdf). than one building if:
Revenue Ruling 2021-20. As a result of Revenue Ruling a. The allocation is made during the project period,
2021-20, 2021-51 I.R.B. 875 (at IRS.gov/pub/irs-drop/ b. The allocation applies only to buildings placed in
rr-21-20.pdf) as clarified by Revenue Procedure 2021-43, service during or after the calendar year in which the
2021-51 I.R.B. 882 (at IRS.gov/pub/irs-drop/rp-21-43.pdf), allocation is made, and
the 4% floor in section 42(b)(3) does not apply to certain c. Each building in the project to which the allocation
arrangements. See Line 2, later. applies is identified by a separate building identification
number (BIN).
General Instructions Regarding (3) and (4) (carryover allocations), see sections
42(h)(1)(E) and 42(h)(1)(F); Taxpayer Certainty and Disaster
Purpose of Form Act of 2020, sections 301(2) and 305(a)(3); and Regulations
Owners of residential low-income rental buildings are section 1.42-6.
allowed a low-income housing credit for each qualified The agency can only make an allocation to a building
building annually over a 10-year credit period. Form 8609 located within its geographical jurisdiction. Once an
can be used to obtain a housing credit allocation from the allocation is made, the credit is allowable for all years during
housing credit agency. A separate Form 8609 must be the 10-year credit period. A separate Form 8609 must be
issued for each building in a multiple building project. Form completed for each building to which an allocation of credit is
8609 is also used to certify certain information. made.
Housing credit agency. This is any state or local agency See the Note next for details on deadlines.
authorized to make low-income housing credit allocations TIP
within its jurisdiction.
Building identification number (BIN). This number is
assigned by the housing credit agency. The BIN initially Note. Regarding (3) (carryover allocations), if the last day for
assigned to a building must be used for any allocation of an owner of a building with a carryover allocation to meet the
credit to the building that requires a separate Form 8609 (see 10% test is:
Multiple Forms 8609, later). For example, rehabilitation • On or after April 1, 2020, and on or before December 31,
expenditures treated as a separate new building shouldn't 2021, the deadline is extended to the original deadline plus 2
have a separate BIN if the building already has one. Use the years;
number first assigned to the building. • On or after January 1, 2021, and before December 31,
2022, the deadline is extended to December 31, 2022.

Feb 11, 2022 Cat. No. 52385A

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  For buildings meeting the 10% test, if the original               Note. The housing credit agency may require you to submit 
placed-in-service deadline for the building is:                     a copy of Form 8609 with a completed Part II to the agency. 
• December 31, 2020, the last day for the owner to place the        You should contact the agency to obtain agency filing 
building in service is December 31, 2022;                           requirements.
• December 31, 2021, and the original deadline for the 10%            Also, file Form 8609-A for each year of the 15-year 
test in section 42(h)(1)(E)(ii) was before April 1, 2020, the       compliance period. The credit is claimed on Form 8586, 
new placed-in-service deadline again is December 31, 2022;          Low-Income Housing Credit. See the forms for filing 
• December 31, 2021, and the original deadline for the 10%          instructions.
test in section 42(h)(1)(E)(ii) was on or after April 1, 2020, 
and on or before December 31, 2020, then the new                    Building Owner's Recordkeeping
placed-in-service deadline is December 31, 2023;                    Keep the following items in your records for three years after 
• December 31, 2022 (and thus the original deadline for the         the due date (including extensions) of the owner's tax return 
10% test was in 2021), then the new placed-in-service               for the tax year that includes the end of the 15-year 
deadline is December 31, 2023.                                      compliance period.
See Notice 2021-12, section IV.A and C, as amended by               • A copy of the original Form 8609 received from the 
Notice 2022-05, section IV.A and C.                                 housing agency and all related Forms 8609-A (or 
Multiple Forms 8609.   Allocations of credit in separate            predecessor Schedules A (Form 8609)), Forms 8586, and 
calendar years require separate Forms 8609. Also, when a            any Forms 8611, Recapture of Low-Income Housing Credit.
building receives separate allocations for acquisition of an        • If the maximum applicable credit percentage allowable on 
existing building and for rehabilitation expenditures, a            line 2 reflects an election under section 42(b)(1)(A)(ii), (or 
separate Form 8609 must be completed for each credit                former section 42(b)(2)(A)(ii), for buildings placed in service 
allocation.                                                         before July 31, 2008), a copy of the election statement.
                                                                    • If the binding agreement specifying the housing credit 
Tax-exempt bonds. No housing credit allocation is required          dollar amount is contained in a separate document, a copy of 
for any portion of the eligible basis of a qualified low-income     the binding agreement.
building that is financed with tax-exempt bonds taken into            If the housing credit dollar amount allocated on line 1b 
                                                                    •
account for purposes of the volume cap under section 146 if         reflects an allocation made under section 42(h)(1)(E) or 
principal payments on the financing are applied within a            section 42(h)(1)(F), a copy of the allocation document.
reasonable period to redeem obligations the proceeds of 
which were used to provide the financing, or the financing is 
refunded as described in section 146(i)(6). An allocation isn't     Specific Instructions
needed when 50% or more of the aggregate basis of the 
building and the land on which the building is located              Part I—Allocation of Credit
(defined below) is financed with tax-exempt bonds described 
in the preceding sentence. However, the owner must still get        Completed by Housing Credit Agency Only
a Form 8609 from the appropriate housing credit agency 
(with the applicable items completed, including an assigned         Addition to qualified basis.   Check this box if an allocation 
BIN).                                                               relates to an increase in qualified basis under section 42(f)
  Land on which the building is located.       This includes        (3). Enter only the housing credit dollar amount for the 
only land that is functionally related and subordinate to the       increase. Don't include any portion of the original qualified 
qualified low-income building. (See Regulations sections            basis when determining this amount.
1.103-8(a)(3) and 1.103-8(b)(4)(iii) for the meaning of             Amended form. Check this box if this form amends a 
“functionally related and subordinate.”)                            previously issued form. Complete all entries and explain the 
                                                                    reason for the amended form. For example, if there is a 
Filing Requirement                                                  change in the amount of initial allocation before the close of 
Housing credit agency. Complete and sign Part I of Form             the calendar year, file an amended Form 8609 instead of the 
8609 and make copies of the form. Submit a copy with Form           original form.
8610, Annual Low-Income Housing Credit Agencies Report,             Item A. Identify the building for which this Form 8609 is 
and keep a copy for the records. The agency must send the           issued when there are multiple buildings with the same 
original, signed Form 8609 (including instructions) to the          address (e.g., BLDG. 6 of 8).
building owner.
                                                                    Line 1a. Generally, where Form 8609 is the allocating 
Building owner. You must make a one-time submission of              document, the date of the allocation is the date the Form 
Form 8609 to the Low-Income Housing Credit (LIHC) Unit at           8609 is completed, signed, and dated by an authorized 
the IRS Philadelphia campus address below. After making a           official of the housing credit agency during the year the 
copy of the completed original Form 8609, file the original of      building is placed in service and mailed to the owner of the 
the form with the unit no later than the due date (including        qualified low-income building.
extensions) of your first tax return with which you are filing        However, if an allocation is made under section 42(h)(1)
Form 8609-A, Annual Statement for Low-Income Housing                (E) or 42(h)(1)(F), the date of allocation is the date the 
Credit.                                                             authorized official of the housing credit agency completes, 
  Where to file Form 8609. Send the properly completed              signs, and dates the section 42(h)(1)(E) or 42(h)(1)(F) 
and signed form(s) to:                                              document used to make the allocation. If no allocation is 
                                                                    required (i.e., 50% or greater tax-exempt bond financed 
  Department of the Treasury                                        building), leave line 1a blank.
  Internal Revenue Service Center
  Philadelphia, PA 19255-0549                                       Line 1b. Enter the housing credit dollar amount allocated to 
                                                                    the building for each year of the 10-year credit period. The 

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amount should equal the percentage on line 2 multiplied by the 70% present value credit, but don't enter less than 9%,
the amount on line 3a. The housing credit agency is required unless the housing credit agency determines that a lesser
to allocate only the amount necessary to assure project amount is necessary to assure project feasibility. For new
feasibility. To accomplish this, the agency can, to the extent buildings that are federally subsidized, or existing buildings,
permitted by the Code and regulations, lower the percentage use the applicable percentage for the 30% present value
on line 2 and the amount on line 3a. See Line 2 next and credit, but don’t enter less than 4% if they meet the criteria in
Line 3a, later, for the limits that apply. For tax-exempt bond Line 2 above for the 4% percentage. See Line 6, later, for the
projects for which no allocation is required, enter the housing definition of “federally subsidized,” and the time period for
credit dollar amount allowable under section 42(h)(4). which the definition applies. A taxpayer may elect under
section 42(i)(2)(B) to reduce eligible basis by the proceeds of
Line 2. The maximum applicable credit percentage
any tax-exempt obligation in order to obtain the higher credit
allowable is determined in part by the date the building was
percentage.
placed in service. Follow the instructions pertaining to the
date the building was placed in service. Additions to qualified basis. For allocations to buildings
for additions to qualified basis under section 42(f)(3), don't
Enter the maximum applicable credit percentage reduce the applicable percentage even though the building
allowable to the building for the month the building was owner may only claim a credit based on two-thirds of the
placed in service or, if applicable, for the month determined credit percentage allocated to the building.
under section 42(b)(1)(A)(ii). This percentage may be less
than the applicable percentage published by the IRS monthly Line 3a. Enter the maximum qualified basis of the building.
in the Internal Revenue Bulletin. In computing qualified basis, the housing credit agency
should use only the amount of eligible basis necessary to
A minimum applicable credit percentage of: result in a qualified basis which, when multiplied by the
CAUTION! percentage on line 2, equals the credit amount on line 1b.
However, the housing credit agency isn't required to reduce
• 4% is in effect for new federally subsidized buildings, and maximum qualified basis and can lower the maximum
for existing buildings, placed into service after December 31, applicable percentage on line 2. To compute qualified basis,
2020. For the minimum 4% rate to apply, a building must also multiply the eligible basis of the qualified low-income building
receive an allocation of housing credit dollar amount after by the smaller of:
December 31, 2020, or have a portion of the building • The fractional number of low-income units to all residential
financed with an obligation described in section 42(h)(4)(A) rental units in the building (the “unit fraction”) or
that is issued after December 31, 2020. If these • The fractional amount of floor space of the low-income
circumstances apply, don’t enter less than 4% on line 2. See units to the floor space of all residential rental units in the
section 42(b)(3) and the Taxpayer Certainty and Disaster Tax building (the “floor space fraction”).
Relief Act of 2020, section 201. But see the Note next.
• 9% is in effect for new non-federally subsidized buildings If the close of the first year of the credit period with
placed in service after July 30, 2008. The 9% minimum TIP respect to a building is on or after April 1, 2020, and
applies to new non-federally subsidized buildings even if the on or before December 31, 2022, then, for purposes
taxpayer made an irrevocable election under former section of section 42(f)(3)(A)(ii), the qualified basis for the building for
42(b)(1)(A)(ii). If this circumstance applies, don’t enter less the first year of the credit period is calculated by taking into
than 9% on line 2. See section 42(b)(2). account any increase in the number of low-income units by
the close of the 6-month period following the close of that first
Note. As a result of Revenue Ruling 2021-20, 2021-51 year. See Notice 2021-12, section IV.E, as clarified by Notice
I.R.B. 875 (at IRS.gov/pub/irs-drop/rr-21-20.pdf) as clarified 2021-17, and amended by Notice 2022-05, section IV.E.
by Revenue Procedure 2021-43, 2021-51 I.R.B. 882 (at
IRS.gov/pub/irs-drop/rp-21-43.pdf), the 4% floor in section Generally, the term "low-income unit" means any unit in a
42(b)(3) does not apply to: building if the unit is rent-restricted and the individuals
occupying the unit meet the income limitation applicable to
• A building that is financed in part with a draw-down exempt the project of which the building is a part. See section 42(i)(3)
facility bond issued in 2020 and on which one or more draws (A). Generally, a unit isn't treated as a low-income unit unless
are taken after December 31, 2020; it's suitable for occupancy and used other than on a transient
• A building that is financed in part with proceeds of an basis. Section 42(i)(3)(B) provides for certain exceptions
exempt facility bond issued in 2020 and in part with proceeds (e.g., units that provide for transitional housing for the
of a different exempt facility bond issued in a minimal amount homeless may qualify as low-income units). See sections
after December 31, 2020; or 42(i)(3) and 42(c)(1)(E) for more information. If individuals
• A building that receives an allocation of housing credit are medical personnel or other essential workers (as defined
dollar amount in 2020 and a minimal additional allocation by state or local governments) who provided services during
after December 31, 2020. the COVID-19 pandemic, then, for purposes of emergency
When requirements of Regulations section 1.42-8 housing provided from April 1, 2020, to December 31, 2022,
must be met. If an election was made under section 42(b) owners of low-income housing projects may treat these
(1)(A)(ii) to use the applicable percentage for a month other individuals as if they were “displaced individuals.” That is,
than the month in which a building is placed in service, the owners could have provided emergency housing for these
requirements of Regulations section 1.42-8 must be met. The individuals during this period pursuant to the provisions of
agency must keep a copy of the binding agreement. The Revenue Procedure 2014-49, 2014-37 I.R.B 535 (at
applicable percentage is published monthly in the Internal IRS.gov/pub/irs-drop/rp-14-49.pdf), and Revenue Procedure
Revenue Bulletin. For new buildings that aren't federally 2014-50, 2014-37 I.R.B. 540 (at IRS.gov/pub/irs-drop/
subsidized under section 42(i)(2)(A) and are placed in rp-14-50.pdf), as applicable. See Notice 2021-12,
service after July 30, 2008, use the applicable percentage for section V.E, as amended by Notice 2022-05, section V.E.

Instructions for Form 8609 (12-2021) -3-

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Except as explained in Line 3b next, the eligible basis for a Note. The placed-in-service date for an existing building is
new building is its adjusted basis as of the close of the first determined separately from the placed-in-service date of
tax year of the credit period. For certain existing buildings, rehabilitation expenditures treated as a separate new
the eligible basis is its acquisition cost plus capital building.
improvements through the close of the first tax year of the
Line 5b. Check this box if the date of allocation on line 1a is
credit period. See Line 3b next and section 42(d) for other
in calendar year 2021 or 2022, the building is located in a
exceptions and details.
qualified disaster zone, and the allocation is discussed in the
Line 3b. Special rule to increase basis for buildings in parenthetical in (3) under Allocation of credit in Purpose of
certain high-cost areas. If the building is located in a Form, earlier.
high-cost area (i.e., “qualified census tract” or “difficult
development area”), the eligible basis may be increased as Note. If you have checked the box on line 5b of your Form
follows. 8609, include, on line 7a of Form 8610, the credit amount
• For new buildings, the eligible basis may be up to 130% of allocated by your Form 8609.
such basis determined without this provision. Line 6. Not more than 90% of the state housing credit ceiling
• For existing buildings, the rehabilitation expenditures for any calendar year can be allocated to projects other than
under section 42(e) may be up to 130% of the expenditures projects involving qualified nonprofit organizations. A project
determined without regard to this provision. involves a qualified nonprofit organization if that qualified
Enter the percentage to which eligible basis was nonprofit organization owns an interest in the project (directly
increased. For example, if the eligible basis was increased to or through a partnership) and materially participates (within
120%, enter “120.” the meaning of section 469(h)) in the development and
Section 42(d)(5)(B)(v) permits a similar increase in basis operation of the project throughout the compliance period.
for any non-federally subsidized building designated by the See section 42(h)(5) for more details.
state agency to need the basis increase to be financially Generally, no credit is allowable for acquisition of an
feasible as part of a qualified low-income housing project. existing building unless substantial rehabilitation is done. See
See section 42(d)(5)(B) for the definitions of qualified sections 42(d)(2)(B)(iv) and 42(f)(5) that were in effect on the
TIP census tract and difficult development area, and for date the allocation was made. Don't issue Form 8609 for
other details. acquisition of an existing building unless substantial
rehabilitation under section 42(e) is placed in service.
Lines 6a and 6d. A building is treated as federally
Note. Before it is increased, the eligible basis must be subsidized if at any time during the tax year or prior tax year
reduced by any federal subsidy which the taxpayer elects to there is outstanding any tax-exempt bond financing, the
exclude from eligible basis. For buildings placed in service proceeds of which are used (directly or indirectly) for the
after July 30, 2008, the eligible basis can't include any costs building or its operation. If a building is federally subsidized,
financed with federal grant proceeds. then box 6a or 6d must be checked regardless of whether the
Line 4. Enter the percentage of the aggregate basis of the taxpayer has informed the housing credit agency that the
building and land on which the building is located that is taxpayer intends to make the election under section 42(i)(2)
financed by certain tax-exempt bonds. If this amount is zero, (B) to reduce the eligible basis by the proceeds of any
enter -0-. Don't leave this line blank. tax-exempt obligation.

Line 5a. The placed-in-service date for a residential rental Part II—First-Year Certification
building is the date the first unit in the building is ready and
available for occupancy under state or local law. Completed by Building Owner With Respect to
Rehabilitation expenditures treated as a separate new
building under section 42(e) are placed in service at the the First Year of the Credit Period
close of any 24-month period over which the expenditures By completing Part II, you are certifying the date the
are aggregated, whether or not the building is occupied ! building is placed in service corresponds to the date
during the rehabilitation period. CAUTION on line 5a. If the Form 8609 issued to you contains
However, for purposes of section 42(e)(3)(A)(ii), if the last the wrong date or no date, obtain a new or amended Form
day of the 24-month period for a building is: 8609 from the housing credit agency.
• On or after April 1, 2020, and before December 31, 2021,
the last day to incur the minimum rehabilitation expenditures Line 7. Enter the eligible basis (in dollars) of the building.
for the building is postponed to the original deadline plus 18 Eligible basis doesn't include the cost of land. Determine
months; eligible basis at the close of the first year of the credit period
• On or after January 1, 2022, and on or before June 30, (see sections 42(f)(1), 42(f)(5), and 42(g)(3)(B)(iii) for
2022, then that deadline is extended to June 30, 2023; determining the start of the credit period).
• On or after July 1, 2022, and on or before December 31, For new buildings, the eligible basis is generally the cost
2022, then that deadline is extended to the original date plus of construction or rehabilitation expenditures incurred under
12 months; section 42(e).
• On or after January 1, 2023, and on or before December For existing buildings, the eligible basis is the cost of
30, 2023, then that original deadline is extended to acquisition plus rehabilitation expenditures not treated as a
December 31, 2023. separate new building under section 42(e) incurred by the
See Notice 2021-12, section IV.B, as amended by Notice close of the first year of the credit period.
2022-05, section IV.B.
If the housing credit agency has entered an increased
percentage in Part I, line 3b, multiply the eligible basis by the
increased percentage and enter the result.

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Residential rental property may qualify for the credit even Notwithstanding a checked “Yes” box on line 8b,
though part of the building in which the residential rental units ! failure to attach a statement providing the above
are located is used for commercial use. Don't include the CAUTION required information will result in each building being
cost of the nonresident rental property. However, you may considered a separate project under section 42(g)(3)(D). The
generally include the basis of common areas or tenant minimum set-aside requirement (see Line 10c, later) is a
facilities, such as swimming pools or parking areas, provided project-based test.
there is no separate fee for the use of these facilities and they
are made available on a comparable basis to all tenants in Two or more qualified low-income buildings may be
the project. If an amenity or common area in a low-income included in a multiple building project only if they:
building or project was temporarily unavailable or closed • Are located on the same tract of land (including contiguous
during some or all of the period from April 1, 2020, to parcels), unless all of the dwelling units in all of the buildings
December 31, 2022, and the unavailability or closure was in being aggregated in the multiple building project are rent
response to the COVID-19 pandemic and not because of restricted units (see section 42(g)(7));
other noncompliance for section 42 purposes, then this • Are owned by the same person for federal tax purposes;
temporary unavailability or closure does not result in a • Are financed under a common plan of financing; and
reduction of the eligible basis of the building. See Notice • Have similarly constructed housing units.
2021-12, section V.C, as amended by Notice 2022-05, A qualified low-income building includes residential rental
section V.C. property that is an apartment building, a single-family
During the above period for common areas, an dwelling, a town house, a row house, a duplex, or a
condominium.
! Agency may deny any application of the above
CAUTION waiver or, based on public health criteria, may limit Line 9a. Follow the instructions that apply for the date the
the waiver to partial closure, or to limited or conditional building was placed in service.
access of an amenity or common area. See Notice 2021-12, You may elect to reduce the eligible basis by the proceeds
section V.C, as amended by Notice 2022-5, section V.C. of any tax-exempt obligation and claim the 70% present
The eligible basis shall not include any costs paid by the value credit on the remaining eligible basis. However, if you
proceeds of a federal grant. Also, reduce the eligible basis by make this election, you may not claim the 30% present value
the entire basis allocable to non-low-income units that are credit on the portion of the basis that was financed with the
above average quality standard of the low-income units in the tax-exempt obligation.
building. You may, however, include a portion of the basis of The 9% and 4% minimum applicable credit
these non-low-income units if the cost of any of these units ! percentages described in Line 2, earlier, still apply.
doesn't exceed by more than 15% the average cost of all CAUTION
low-income units in the building and you elect to exclude this
excess cost from the eligible basis by checking the “Yes” box Line 9b. See Line 7, earlier.
on line 9b. See section 42(d)(3). Line 10a. You may elect to begin the credit period in the tax
You may elect to reduce the eligible basis by the proceeds year after the building is placed in service. Once made, the
of any tax-exempt obligation to obtain a higher credit election is irrevocable.
percentage. To make this election, check the “Yes” box in
Part II, line 9a. Reduce the eligible basis by the obligation Note. Section 42(g)(3)(B)(iii) provides special rules for
proceeds before entering the amount on line 7. You must determining the start of the credit period for certain multiple
reduce the eligible basis by such obligation proceeds before building projects.
multiplying the eligible basis by the increased percentage in Line 10b. Partnerships with 35 or more partners are treated
Part I, line 3b. as the taxpayer for purposes of recapture unless an election
Line 8a. Multiply the eligible basis of the building shown on is made not to treat the partnership as the taxpayer. Check
line 7 by the smaller of the unit fraction or the floor space the “Yes” box if you don't want the partnership to be treated
fraction as of the close of the first year of the credit period as the taxpayer for purposes of recapture. Once made, the
and enter the result on line 8a. Low-income units are units election is irrevocable.
occupied by qualifying tenants, while residential rental units Line 10c. You must meet the minimum set-aside
are all units, whether or not occupied. See Line 3a, earlier. requirements under section 42(g)(1) for the project by
Line 8b. Each building is considered a separate project electing one of the following tests. Once made, the election is
under section 42(g)(3)(D) unless, before the close of the first irrevocable.
calendar year in the project period (defined in section 42(h) • 20-50 Test. Twenty percent (20%) or more of the
(1)(F)(ii)), each building that is (or will be) part of a multiple residential units in the project must be both rent restricted
building project is identified by attaching the statement and occupied by individuals whose income is 50% or less of
described below. the area median gross income.
• 40-60 Test. Forty percent (40%) or more of the residential
The statement must be attached to this Form 8609 and units in the project must be both rent restricted and occupied
include: by individuals whose income is 60% or less of the area
• The name and address of the project and each building in median gross income.
the project, • Average Income Test. Forty percent (40%) or more (25%
• The BIN of each building in the project, or more in the case of a project described in section 142(d)
• The aggregate credit dollar amount for the project, and (6)) of the residential units in the project must be both rent
• The credit allocated to each building in the project. restricted and occupied by individuals whose income does
not exceed the imputed income limitation designated by the
taxpayer with respect to the respective unit. The average of

Instructions for Form 8609 (12-2021) -5-

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

the imputed income limitations designated must not be more be occupied at all times during the compliance period by
than 60% of the area median gross income. The designated tenants whose income is 40% or less of the area median
imputed income limitation of a unit can only be 20%, 30%, gross income (or when applicable, national non-metropolitan
40%, 50%, 60%, 70%, or 80% of the area median gross median income). A deep rent skewed project itself must meet
income. the requirements of section 142(d)(4)(B). Once made, the
election is irrevocable.
The average income test is only available for
! elections made after March 23, 2018. Privacy Act and Paperwork Reduction Act Notice. We
CAUTION
ask for the information on this form to carry out the Internal
Note. Owners of buildings in projects located in New York Revenue laws of the United States. Claiming this credit is
City may not use the 40-60 Test. Instead, they may use the voluntary; however, if you do claim the credit, sections 42,
25-60 Test. Under the 25-60 Test, 25% or more of the 6001, and 6011 require you to provide this information.
residential units in the project must be both rent restricted Section 6109 requires you to provide your taxpayer
and occupied by individuals whose income is 60% or less of identifying number (SSN, EIN, or ITIN). We need this
the area median gross income (see section 142(d)(6)). information to ensure that you are complying with the
revenue laws and to allow us to figure and collect the right
Rural projects. For purposes of the 20-50, 40-60,
amount of tax. We may disclose this information to the
average income, and 25-60 tests, “national non-metropolitan
Department of Justice for civil or criminal litigation, and to
median income” will be used for determining income if it
cities, states, the District of Columbia, and U.S.
exceeds “area median gross income,” but only for
commonwealths and possessions for use in administering
determinations of income made after July 30, 2008, and
their tax laws. We may also disclose this information to other
buildings with an allocation of credit. See section 42(i)(8) for
countries under a tax treaty, to federal and state agencies to
details.
enforce federal nontax criminal laws, or to federal law
The minimum set-aside requirement is a enforcement and intelligence agencies to combat terrorism.
! project-based test and must be met by the close of Failure to provide this information may delay or prevent
CAUTION the first year of the credit period in order to claim any processing your claim. Providing false information may
credit for the first year or for any subsequent years. subject you to penalties.
Line 10d. The deep rent skewed 15-40 election isn't an You are not required to provide the information requested
additional test for satisfying the minimum set-aside on a form that is subject to the Paperwork Reduction Act
requirements of section 42(g)(1). The 15-40 test is an unless the form displays a valid OMB control number. Books
election that relates to the determination of a low-income or records relating to a form or its instructions must be
tenant's income. Generally, a continuing resident's income retained as long as their contents may become material in
may increase up to 140% of the applicable income limit. the administration of any Internal Revenue law.
• If the 20-50, 40-60, or 25-60 test under the minimum
The time needed to complete and file the form will vary
set-aside rules described, earlier, in Line 10c has been
depending on individual circumstances. The estimated
elected, the applicable income limit generally is 50% or less
average time is:
or 60% or less of the area median gross income (or, when
applicable, national non-metropolitan median income).
• If the average income test in Line 10c has been elected, Learning about the law or the form. . . . . . . . 4 hr., 10 min.
the applicable income limit generally is the imputed income Recordkeeping . . . . . . . . . . . . . . . . . . . . 10 hr., 45min.
limitation designated by the taxpayer with respect to the Preparing and sending the form to the IRS. . . 4 hr., 31 min.
respective unit. The average of the imputed income
limitations designated must not exceed 60% of the area
median gross income (or, when applicable, national If you have comments concerning the accuracy of these
non-metropolitan median income). Also, the designated time estimates or suggestions for making these forms
imputed income limitation of any unit must be in 10% simpler, we would be happy to hear from you. You can send
increments between the range of 20% and 80% of the area your comments from IRS.gov/FormsPubs. Click on “Help
median gross income (or, when applicable, national with Forms and Instructions” and then on “Give us feedback.”
non-metropolitan median income). Or you can send your comments to the Internal Revenue
When the deep rent skewed election is made, the income Service, Tax Forms and Publications, 1111 Constitution Ave.
of a continuing resident may increase up to 170% of the NW, IR-6526, Washington, DC, 20224. Do not send the tax
applicable income limit. If the deep rent skewed election is form to this office. Instead, see Filing Requirement, earlier.
made, at least 15% of all low-income units in the project must

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