There are four factors that can help you decide whether your rehabilitation project would meet the basic eligibility requirements for the 20% tax credit. The amount of credit available under this program equals 20% of the qualifying expenses of your rehabilitation.
Meets Significance Requirements
The historic building is listed in the National Register of Historic Places or is certified as contributing to the significance of a registered historic district.
Meets the Substantial Rehabilitation Test
The project must meet the substantial rehabilitation test.
Meets the Secretary of the Interior’s Standards for Rehabilitation
The rehabilitation work is completed according to the Secretary of the Interior's Standards for Rehabilitation.
Meets Income-Production Requirements
After rehabilitation, the historic building is used for an income-producing purpose for at least five years.
Before applying, consult your accountant or tax advisor to ensure the federal tax credit is beneficial to you. Certain income and other restrictions may have a bearing on whether you are able to use the credit. Internal Revenue Service administers the Department of the Treasury’s involvement with the Federal Historic Preservation Tax Incentives Program. The Internal Revenue Service has provided written guidance on these complex federal regulations.