Instructions for Form 8609

Instructions for Form 8609

(Rev. December 2025)

Low-Income Housing Credit Allocation and Certification

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to

Form 8609 and its instructions, such as legislation enacted

after they were published, go to IRS.gov/Form8609.

Reminders

Minimum credit rate. The Taxpayer Certainty and Disaster

Tax Relief Act of 2020 set a minimum applicable credit

percentage of 4% for certain buildings. See Line 2 and

Line 9a, later.

Qualified disaster zones. The Taxpayer Certainty and

Disaster Tax Relief Act of 2020 extends the deadlines for

meeting the 10% and placed-in-service requirements under

section 42(h)(1)(E) for designated buildings located in a

qualified disaster zone. See Line 5b and also Allocation of

credit under Purpose of Form, later.

Notice 2021-12. The instructions have been updated

throughout, as needed, to reflect the temporary relief

provided in Notice 2021-12, 2021-6 I.R.B. 828 (at

IRS.gov/pub/irs-drop/n-21-12.pdf), as clarified by Notice

2021-17, 2021-14 I.R.B. 984 (at IRS.gov/pub/irs-drop/

n-21-17.pdf), and as amended by Notice 2022-5, 2022-5

I.R.B. 457 (at IRS.gov/pub/irs-drop/n-22-05.pdf).

Revenue Ruling 2021-20. As a result of Revenue Ruling

2021-20, 2021-51 I.R.B. 875 (at IRS.gov/pub/irs-drop/

rr-21-20.pdf) as clarified 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 42(b)(3) does not apply to certain

arrangements. See Line 2, later.

General Instructions

Purpose of Form

Owners of residential low-income rental buildings are allowed

a low-income housing credit for each qualified building

annually over a 10-year credit period. Form 8609 can be

used to obtain a housing credit allocation from the housing

credit agency. A separate Form 8609 must be issued for each

building in a multiple building project. Form 8609 is also used

to certify certain information.

Housing credit agency. This is any state or local agency

authorized to make low-income housing credit allocations

within its jurisdiction.

Building identification number (BIN). This number is

assigned by the housing credit agency. The BIN initially

assigned to a building must be used for any allocation of

credit to the building that requires a separate Form 8609 (see

Multiple Forms 8609, later). For example, rehabilitation

expenditures treated as a separate new building shouldn’t

have a separate BIN if the building already has one. Use the

number first assigned to the building.

Dec 11, 2025

Allocation of credit. For an owner to claim a low-income

housing credit on a building (except as explained under

Tax-exempt bonds, later), the housing credit agency must

make an allocation of the credit by the close of the calendar

year in which the building is placed in service, unless:

1. The allocation is the result of an advance binding

commitment by the housing credit agency made not later

than the close of the calendar year in which the building is

placed in service (see section 42(h)(1)(C));

2. The allocation relates to an increase in qualified basis

(see section 42(h)(1)(D));

3. The allocation is made for a building placed in service

no later than the second calendar year following the calendar

year in which the allocation is made if the building is part of a

project in which the taxpayer’s basis as of the date that is 1

year after the date that the allocation was made is more than

10% of the project’s reasonably expected basis as of the end

of that second calendar year (for certain calendar year 2021

or 2022 allocations to buildings in qualified disaster areas

replace “second calendar year” with “third calendar year” and

“1 year” with “2 years” (see your housing credit agency and

the Taxpayer Certainty and Disaster Tax Relief Act of 2020,

sections 301(2) and 305(a)(3), for more information)) (also

see the Note below for other extensions); or

4. The allocation is made for a project that includes more

than one building if:

a. The allocation is made during the project period,

b. The allocation applies only to buildings placed in

service during or after the calendar year in which the

allocation is made, and

c. Each building in the project to which the allocation

applies is identified by a separate building identification

number (BIN).

Regarding (3) and (4) (carryover allocations), see sections

42(h)(1)(E) and 42(h)(1)(F); Taxpayer Certainty and Disaster

Act of 2020, sections 301(2) and 305(a)(3); and Regulations

section 1.42-6.

The agency can only make an allocation to a building

located within its geographical jurisdiction. Once an

allocation is made, the credit is allowable for all years during

the 10-year credit period. A separate Form 8609 must be

completed for each building to which an allocation of credit is

made.

Note: Regarding (3) (carryover allocations), if the last day

for an owner of a building with a carryover allocation to meet

the 10% test is:

• On or after April 1, 2020, and before 2022, the deadline is

extended to the original deadline plus 2 years;

• On or after January 1, 2021, and before December 31,

2022, the deadline is extended to December 31, 2022.

If the original placed-in service deadline for a building

meeting the 10% test is one of the following, use the

placed-in-service deadline provided.

• If December 31, 2020, the last day for the owner to place

the building in service is December 31, 2022.

Instructions for Form 8609 (Rev. 12-2025) Catalog Number 52385A

Department of the Treasury Internal Revenue Service www.irs.gov

• If December 31, 2021, and the original deadline for the

10% test in section 42(h)(1)(E)(ii) was before April 1, 2020,

the placed-in-service deadline again is December 31, 2022.

• If December 31, 2021, and the original deadline for the

10% test in section 42(h)(1)(E)(ii) was on or after April 1,

2020, and before 2021, then the placed-in-service deadline

is December 31, 2023.

• If December 31, 2022 (and thus the original deadline for

the 10% test was in 2021), then the placed-in-service

deadline is December 31, 2023.

See Notice 2021-12, section IV(A) and (C), as amended by

Notice 2022-5, section IV(A) and (C).

Multiple Forms 8609. Allocations of credit in separate

calendar years require separate Forms 8609. Also, when a

building receives separate allocations for acquisition of an

existing building and for rehabilitation expenditures, a

separate Form 8609 must be completed for each credit

allocation.

Tax-exempt bonds. No housing credit allocation is required

for any portion of the eligible basis of a qualified low-income

building that is financed with tax-exempt bonds taken into

account for purposes of the volume cap under section 146 if

principal payments on the financing are applied within a

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

needed when 50% or more of the aggregate basis of the

building and the land on which the building is located

(defined below) is financed with tax-exempt bonds described

in the preceding sentence. However, the owner must still get

a Form 8609 from the appropriate housing credit agency

(with the applicable items completed, including an assigned

BIN).

Land on which the building is located. This includes

only land that is functionally related and subordinate to the

qualified low-income building. (See Regulations sections

1.103-8(a)(3) and 1.103-8(b)(4)(iii) for the meaning of

“functionally related and subordinate.”)

Filing Requirement

Housing credit agency. Complete and sign Part I of Form

8609 and make copies of the form. Submit a copy with Form

8610, Annual Low-Income Housing Credit Agencies Report,

and keep a copy for the records. The agency must send the

original, signed Form 8609 (including instructions) to the

building owner.

Building owner. You must make a one-time submission of

Form 8609 to the Low-Income Housing Credit (LIHC) Unit at

the IRS Philadelphia campus address below. After making a

copy of the completed original Form 8609, file the original of

the form with the unit no later than the due date (including

extensions) of your first tax return with which you are filing

Form 8609-A, Annual Statement for Low-Income Housing

Credit.

Where to file Form 8609. Send the properly completed

and signed form(s) to:

Department of the Treasury

Internal Revenue Service Center

Philadelphia, PA 19255-0549

Note: The housing credit agency may require you to

submit a copy of Form 8609 with a completed Part II to the

agency. You should contact the agency to obtain agency

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filing requirements. The copy of Form 8609, Part II, that you

submit to the agency should match the Form 8609, Part II,

filed with the IRS.

Also, file Form 8609-A for each year of the 15-year

compliance period. The credit is claimed on Form 8586,

Low-Income Housing Credit. See the forms for filing

instructions.

Building Owner’s Recordkeeping

Keep the following items in your records for 3 years after the

due date (including extensions) of the owner’s tax return for

the tax year that includes the end of the 15-year compliance

period.

• A copy of the original Form 8609 received from the

housing agency and all related Forms 8609-A (or

predecessor Schedules A (Form 8609)), Forms 8586, and

any Forms 8611, Recapture of Low-Income Housing Credit.

• If the maximum applicable credit percentage allowable on

line 2 reflects an election under section 42(b)(1)(A)(ii) (or

former section 42(b)(2)(A)(ii) for buildings placed in service

before July 31, 2008), a copy of the election statement.

• If the binding agreement specifying the housing credit

dollar amount is contained in a separate document, a copy of

the binding agreement.

• If the housing credit dollar amount allocated on line 1b

reflects an allocation made under section 42(h)(1)(E) or

section 42(h)(1)(F), a copy of the allocation document.

Specific Instructions

Part I—Allocation of Credit

Completed by Housing Credit Agency Only

Addition to qualified basis. Check this box if an allocation

relates to an increase in qualified basis under section 42(f)

(3). Enter only the housing credit dollar amount for the

increase. Don’t include any portion of the original qualified

basis when determining this amount.

Amended form. Check this box if this form amends a

previously issued form. Complete all entries and explain the

reason for the amended form. For example, if there is a

change in the amount of initial allocation before the close of

the calendar year, file an amended Form 8609 instead of the

original form.

Item A. Identify the building for which this Form 8609 is

issued when there are multiple buildings with the same

address (for example, BLDG. 6 of 8).

Line 1a. Generally, where Form 8609 is the allocating

document, the date of the allocation is the date the Form

8609 is completed, signed, and dated by an authorized

official of the housing credit agency during the year the

building is placed in service and mailed to the owner of the

qualified low-income building.

However, if an allocation is made under section 42(h)(1)

(E) or 42(h)(1)(F), the date of allocation is the date the

authorized official of the housing credit agency completes,

signs, and dates the section 42(h)(1)(E) or 42(h)(1)(F)

document used to make the allocation. If 50% or greater of

the building is financed by tax-exempt bonds, no allocation is

required, and you will leave line 1a blank.

Line 1b. Enter the housing credit dollar amount allocated to

the building for each year of the 10-year credit period. The

amount should equal the percentage on line 2 multiplied by

Instructions for Form 8609 (12-2025)

the amount on line 3a. The housing credit agency is required

to allocate only the amount necessary to assure project

feasibility. To accomplish this, the agency can, to the extent

permitted by the Code and regulations, lower the percentage

on line 2 and the amount on line 3a. See Line 2 next and

Line 3a, later, for the limits that apply. For tax-exempt bond

projects for which no allocation is required, enter the housing

credit dollar amount allowable under section 42(h)(4).

Line 2. The maximum applicable credit percentage

allowable is determined in part by the date the building was

placed in service. Follow the instructions pertaining to the

date the building was placed in service.

Enter the maximum applicable credit percentage

allowable to the building for the month the building was

placed in service or, if applicable, for the month determined

under section 42(b)(1)(A)(ii). This percentage may be less

than the applicable percentage published by the IRS monthly

in the Internal Revenue Bulletin.

A minimum applicable credit percentage of:

• 4% is in effect for new federally subsidized buildings, and

for existing buildings, placed into service after 2020. For the

minimum 4% rate to apply, a building must also receive an

allocation of housing credit dollar amount after 2020, or have

a portion of the building financed with an obligation described

in section 42(h)(4)(A) that is issued after 2020. If these

circumstances apply, don’t enter less than 4% on line 2. See

section 42(b)(3) and the Taxpayer Certainty and Disaster Tax

Relief Act of 2020, section 201. Also, see the Caution next.

• 9% is in effect for new non-federally subsidized buildings

placed in service after July 30, 2008. The 9% minimum

applies to new non-federally subsidized buildings even if the

taxpayer made an irrevocable election under former section

42(b)(1)(A)(ii). If this circumstance applies, don’t enter less

than 9% on line 2. See section 42(b)(2).

Caution: As a result of Revenue Ruling 2021-20, 2021-51

I.R.B. 875 (at IRS.gov/pub/irs-drop/rr-21-20.pdf) as clarified

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

42(b)(3) does not apply to:

• A building that is financed in part with a draw-down exempt

facility bond issue that was issued in 2020 and on which one

or more draws are taken after 2020;

• A building that is financed in part with proceeds of an

exempt facility bond issue that was issued in 2020 and in part

with proceeds of a different exempt facility bond issue that

was issued in a minimal amount after 2020; or

• A building that receives an allocation of housing credit

dollar amount in 2020 and a minimal additional allocation

after 2020.

When requirements of Regulations section 1.42-8

must be met. If an election was made under section 42(b)

(1)(A)(ii) to use the applicable percentage for a month other

than the month in which a building is placed in service, the

requirements of Regulations section 1.42-8 must be met. The

agency must keep a copy of the binding agreement. The

applicable percentage is published monthly in the Internal

Revenue Bulletin. For new buildings that aren’t federally

subsidized under section 42(i)(2)(A) and are placed in

service after July 30, 2008, use the applicable percentage for

the 70% present value credit, but don’t enter less than 9%,

unless the housing credit agency determines that a lesser

amount is necessary to assure project feasibility. For new

buildings that are federally subsidized, or for existing

buildings, use the applicable percentage for the 30% present

value credit, but don’t enter less than 4% if they meet the

Instructions for Form 8609 (12-2025)

criteria in Line 2 above for the 4% percentage. See Line 6,

later, for the definition of “federally subsidized” and the time

period for which the definition applies. A taxpayer may elect

under section 42(i)(2)(B) to reduce eligible basis by the

proceeds of any tax-exempt obligation in order to obtain the

higher credit percentage.

Additions to qualified basis. For allocations to buildings

for additions to qualified basis under section 42(f)(3), don’t

reduce the applicable percentage even though the building

owner may only claim a credit based on two-thirds of the

credit percentage allocated to the building.

Line 3a. Enter the maximum qualified basis of the building.

In computing qualified basis, the housing credit agency

should use only the amount of eligible basis necessary to

result in a qualified basis that, when multiplied by the

percentage on line 2, equals the credit amount on line 1b.

Persons filing Form 8609-A should see the Caution at the end

of this section.

However, the housing credit agency isn’t required to

reduce maximum qualified basis and can lower the maximum

applicable percentage on line 2. Generally, to compute

qualified basis, unless limited as stated above, multiply the

eligible basis of the qualified low-income building by the

smaller of:

• The fractional number of low-income units to all residential

rental units in the building (the “unit fraction”), or

• The fractional amount of floor space of the low-income

units to the floor space of all residential rental units in the

building (the “floor space fraction”).

But see the Tip at the end of this section.

Generally, the term “low-income unit” means any unit in a

building if the unit is rent restricted and the individuals

occupying the unit meet the income limitation applicable to

the project of which the building is a part. See section 42(i)(3)

(A). Generally, a unit isn’t treated as a low-income unit unless

it’s suitable for occupancy and used other than on a transient

basis. Section 42(i)(3)(B) provides for certain exceptions (for

example, units that provide for transitional housing for the

homeless may qualify as low-income units). See sections

42(i)(3) and 42(c)(1)(E) for more information. If individuals

are medical personnel or other essential workers (as defined

by state or local governments) who provided services during

the COVID-19 pandemic, then, for purposes of emergency

housing provided from April 1, 2020, to December 31, 2022,

owners of low-income housing projects may treat these

individuals as if they were “displaced individuals.” That is,

owners could have provided emergency housing for these

individuals during this period pursuant to the provisions of

Revenue Procedure 2014-49, 2014-37 I.R.B. 535 (at

IRS.gov/pub/irs-drop/rp-14-49.pdf), and Revenue Procedure

2014-50, 2014-37 I.R.B. 540 (at IRS.gov/pub/irs-drop/

rp-14-50.pdf), as applicable. See Notice 2021-12,

section V(E), as amended by Notice 2022-5, section V(E).

Except as explained in Line 3b next, the eligible basis for a

new building is its adjusted basis as of the close of the first

tax year of the credit period. For certain existing buildings, the

eligible basis is its acquisition cost plus capital improvements

through the close of the first tax year of the credit period. See

Line 3b next and section 42(d) for other exceptions and

details.

Caution: For persons filing Form 8609-A, the qualified

basis on Form 8609-A, line 3, is limited to the maximum

qualified basis shown on Form 8609, line 3a, for the

low-income building if, in computing qualified basis, the

housing credit agency uses only the amount of eligible basis

3

necessary to result in a qualified basis that, when multiplied

by the credit percentage on Form 8609, line 2, equals the

credit amount on Form 8609, line 1.

Tip: If the close of the first year of the credit period with

respect to a building is on or after April 1, 2020, and before

2023, then, for purposes of section 42(f)(3)(A)(ii), the

qualified basis for the building for the first year of the credit

period is calculated by taking into account any increase in the

number of low-income units by the close of the 6-month

period following the close of that first year. See Notice

2021-12, section IV(E), as clarified by Notice 2021-17, and

amended by Notice 2022-5, section IV(E).

Line 3b. Special rule to increase basis for buildings in

certain high-cost areas. If the building is located in a

high-cost area (that is, “qualified census tract” or “difficult

development area”), the eligible basis may be increased as

follows.

• For new buildings, the eligible basis may be up to 130% of

such basis determined without this provision.

• For existing buildings, the rehabilitation expenditures under

section 42(e) may be up to 130% of the expenditures

determined without regard to this provision.

Enter the percentage to which eligible basis was

increased. For example, if the eligible basis was increased to

120%, enter “120.”

Section 42(d)(5)(B)(v) permits a similar increase in basis

for any non-federally subsidized building designated by the

state agency to need the basis increase to be financially

feasible as part of a qualified low-income housing project.

Tip: See section 42(d)(5)(B) for the definitions of qualified

census tract and difficult development area, and for other

details.

Note: Before it is increased, the eligible basis must be

reduced by any federal subsidy that the taxpayer elects to

exclude from eligible basis. For buildings placed in service

after July 30, 2008, the eligible basis can’t include any costs

financed with federal grant proceeds.

Line 4. Enter the percentage of the aggregate basis of the

building and land on which the building is located that is

financed by certain tax-exempt bonds. If this amount is zero,

enter -0-. Don’t leave this line blank.

Line 5a. The placed-in-service date for a residential rental

building is the date the first unit in the building is ready and

available for occupancy under state or local law.

Rehabilitation expenditures treated as a separate new

building under section 42(e) are placed in service at the

close of any 24-month period over which the expenditures

are aggregated, whether or not the building is occupied

during the rehabilitation period.

However, for purposes of section 42(e)(3)(A)(ii), if the last

day of the 24-month period for a building is:

• On or after April 1, 2020, and before December 31, 2021,

the last day to incur the minimum rehabilitation expenditures

for the building is postponed to the original deadline plus 18

months;

• On or after January 1, 2022, and on or before June 30,

2022, then that deadline is extended to June 30, 2023;

• On or after July 1, 2022, and before 2023, then that

deadline is extended to the original date plus 12 months; or

• On or after January 1, 2023, and before December 31,

2023, then that original deadline is extended to December

31, 2023.

See Notice 2021-12, section IV(B), as amended by Notice

2022-5, section IV(B).

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Note: The placed-in-service date for an existing building is

determined separately from the placed-in-service date of

rehabilitation expenditures treated as a separate new

building.

Line 5b. Check this box if the date of allocation on line 1a is

in calendar year 2021 or 2022, the building is located in a

qualified disaster zone, and the allocation is discussed in the

parenthetical in (3) under Allocation of credit in Purpose of

Form, earlier.

Note: If you have checked the box on line 5b of your Form

8609, include on Form 8610, line 7a, the credit amount

allocated by your Form 8609.

Line 6. Not more than 90% of the state housing credit ceiling

for any calendar year can be allocated to projects other than

projects involving qualified nonprofit organizations. A project

involves a qualified nonprofit organization if that qualified

nonprofit organization owns an interest in the project (directly

or through a partnership) and materially participates (within

the meaning of section 469(h)) in the development and

operation of the project throughout the compliance period.

See section 42(h)(5) for more details.

Generally, no credit is allowable for acquisition of an

existing building unless substantial rehabilitation is done. See

sections 42(d)(2)(B)(iv) and 42(f)(5) that were in effect on the

date the allocation was made. Don’t issue Form 8609 for

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

subsidized if at any time during the tax year or prior tax year

there is outstanding any tax-exempt bond financing, the

proceeds of which are used (directly or indirectly) for the

building or its operation. If a building is federally subsidized,

then box 6a or 6d must be checked regardless of whether the

taxpayer has informed the housing credit agency that the

taxpayer intends to make the election under section 42(i)(2)

(B) to reduce the eligible basis by the proceeds of any

tax-exempt obligation.

Part II—First-Year Certification

Completed by Building Owner With Respect to

the First Year of the Credit Period

Caution: By completing Part II, you are certifying the date

the building is placed in service corresponds to the date on

line 5a. If the Form 8609 issued to you contains the wrong

date or no date, obtain a new or amended Form 8609 from

the housing credit agency.

Line 7. Enter the eligible basis (in dollars) of the building.

Eligible basis doesn’t include the cost of land. Don’t reduce

eligible basis by any energy credit for property placed in

service after 2022 or clean electricity investment credit for

property placed in service after 2024. See section 50(c)(3)

(C) for details. Determine eligible basis at the close of the first

year of the credit period (see sections 42(f)(1), 42(f)(5), and

42(g)(3)(B)(iii) for determining the start of the credit period).

The eligible basis of new buildings is generally the cost of

construction. Rehabilitation expenditures under section 42(e)

are treated as a separate new building.

For existing buildings, the eligible basis is the cost of

acquisition plus rehabilitation expenditures not treated as a

separate new building under section 42(e) as of the close of

the first year of the credit period.

Instructions for Form 8609 (12-2025)

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.

Residential rental property may qualify for the credit even

though part of the building in which the residential rental units

are located is used for commercial use. Don’t include the

cost of the nonresident rental property. However, you may

generally include the basis of common areas or tenant

facilities, such as swimming pools or parking areas, provided

there is no separate fee for the use of these facilities and they

are made available on a comparable basis to all tenants in

the project. If an amenity or common area in a low-income

building or project was temporarily unavailable or closed

during some or all of the period from April 1, 2020, to

December 31, 2022, and the unavailability or closure was in

response to the COVID-19 pandemic and not because of

other noncompliance for section 42 purposes, then this

temporary unavailability or closure does not result in a

reduction of the eligible basis of the building. See Notice

2021-12, section V(C), as amended by Notice 2022-5,

section V(C).

During the above period for common areas, an agency

may deny any application of the above waiver or, based on

public health criteria, may limit the waiver to partial closure, or

to limited or conditional access of an amenity or common

area. See Notice 2021-12, section V(C), as amended by

Notice 2022-5, section V(C).

The eligible basis shall not include any costs paid by the

proceeds of a federal grant. Also, reduce the eligible basis by

the entire basis allocable to non-low-income units that are

above average quality standard of the low-income units in the

building. You may, however, include a portion of the basis of

these non-low-income units if the cost of any of these units

doesn’t exceed by more than 15% the average cost of all

low-income units in the building and you elect to exclude this

excess cost from the eligible basis by checking the “Yes” box

on line 9b. See section 42(d)(3).

You may elect to reduce the eligible basis by the proceeds

of any tax-exempt obligation to obtain a higher credit

percentage. To make this election, check the “Yes” box in Part

II, line 9a. Reduce the eligible basis by the obligation

proceeds before entering the amount on line 7. You must

reduce the eligible basis by such obligation proceeds before

multiplying the eligible basis by the increased percentage in

Part I, line 3b.

Line 8a. Multiply the eligible basis of the building shown on

line 7 by the smaller of the unit fraction or the floor space

fraction as of the close of the first year of the credit period

and enter the result on line 8a. Low-income units are units

occupied by qualifying tenants, while residential rental units

are all units, whether or not occupied. See Line 3a, earlier.

Line 8b. Each building is considered a separate project

under section 42(g)(3)(D) unless, before the close of the first

calendar year in the project period (defined in section 42(h)

(1)(F)(ii)), each building that is (or will be) part of a multiple

building project is identified by attaching the statement

described below.

The statement must be attached to this Form 8609 and

include:

• The name and address of the project and each building in

the project,

• The BIN of each building in the project,

• The aggregate credit dollar amount for the project, and

• The credit allocated to each building in the project.

Instructions for Form 8609 (12-2025)

Notwithstanding a checked “Yes” box on line 8b, failure to

attach a statement providing the above required information

will result in each building being considered a separate

project under section 42(g)(3)(D). The minimum set-aside

requirement (see Line 10c, later) is a project-based test.

Two or more qualified low-income buildings may be

included in a multiple building project only if they:

• Are located on the same tract of land (including contiguous

parcels), unless all of the dwelling units in all of the buildings

being aggregated in the multiple building project are

rent-restricted units (see section 42(g)(7));

• Are owned by the same person for federal tax purposes;

• Are financed under a common plan of financing; and

• Have similarly constructed housing units.

A qualified low-income building includes residential rental

property that is an apartment building, a single-family

dwelling, a townhouse, a row house, a duplex, or a

condominium.

Line 9a. Follow the instructions that apply for the date the

building was placed in service.

You may elect to reduce the eligible basis by the proceeds

of any tax-exempt obligation and claim the 70% present value

credit on the remaining eligible basis. However, if you make

this election, you may not claim the 30% present value credit

on the portion of the basis that was financed with the

tax-exempt obligation.

Caution: The 9% and 4% minimum applicable credit

percentages described in Line 2, earlier, still apply.

Line 9b. See Line 7, earlier.

Line 10a. You may elect to begin the credit period in the tax

year after the building is placed in service. Once made, the

election is irrevocable.

Note: Section 42(g)(3)(B)(iii) provides special rules for

determining the start of the credit period for certain multiple

building projects.

Line 10b. A partnership with 35 or more partners is treated

as the taxpayer for purposes of recapture unless an election

is made not to treat the partnership as the taxpayer. Check

the “Yes” box if you don’t want the partnership to be treated

as the taxpayer for purposes of recapture. Once made, the

election is irrevocable.

Line 10c. You must meet the minimum set-aside

requirements under section 42(g)(1) for the project by

electing one of the following tests. Once made, the election is

irrevocable.

• 20-50 test. Twenty percent (20%) or more of the

residential units in the project must be both rent restricted

and occupied by individuals whose income is 50% or less of

the area median gross income.

• 40-60 test. Forty percent (40%) or more of the residential

units in the project must be both rent restricted and occupied

by individuals whose income is 60% or less of the area

median gross income. But see New York City projects, later.

• Average income test. Forty percent (40%) or more (25%

or more in the case of a project described in section 142(d)

(6)) of the residential units in the project must be both rent

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

the imputed income limitations designated must not be more

than 60% of the area median gross income. The designated

imputed income limitation of a unit can only be 20%, 30%,

40%, 50%, 60%, 70%, or 80% of the area median gross

5

income.The average income test is only available for

elections made after March 23, 2018.

New York City projects. Owners of buildings in projects

located in New York City may not use the 40-60 test. Instead,

they may use the 25-60 test. Under the 25-60 test, 25% or

more of the residential units in the project must be both rent

restricted and occupied by individuals whose income is 60%

or less of the area median gross income (see section 142(d)

(6)).

Rural projects. For purposes of the 20-50, 40-60,

average income, and 25-60 tests, “national non-metropolitan

median income” will be used for determining income if it

exceeds “area median gross income,” but only for

determinations of income made after July 30, 2008, and

buildings with an allocation of credit. See section 42(i)(8) for

details.

Deadline for meeting minimum set-aside

requirements. The minimum set-aside requirement is a

project-based test and must be met by the close of the first

year of the credit period in order to claim any credit for the

first year or for any subsequent years.

Line 10d. The deep rent skewed 15-40 election isn’t an

additional test for satisfying the minimum set-aside

requirements of section 42(g)(1). The 15-40 test is an

election that relates to the determination of a low-income

tenant's income. Generally, a continuing resident’s income

may increase up to 140% of the applicable income limit.

• If the 20-50, 40-60, or 25-60 test under the minimum

set-aside rules described, earlier, in Line 10c has been

elected, the applicable income limit generally is 50% or less

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,

the applicable income limit generally is the imputed income

limitation designated by the taxpayer with respect to the

respective unit. The average of the imputed income

limitations designated must not exceed 60% of the area

median gross income (or, when applicable, national

non-metropolitan median income). Also, the designated

imputed income limitation of any unit must be in 10%

increments between the range of 20% and 80% of the area

median gross income (or, when applicable, national

non-metropolitan median income).

When the deep rent skewed election is made, the income

of a continuing resident may increase up to 170% of the

applicable income limit. If the deep rent skewed election is

made, at least 15% of all low-income units in the project must

be occupied at all times during the compliance period by

tenants whose income is 40% or less of the area median

gross income (or, when applicable, national non-metropolitan

6

median income). A deep rent skewed project itself must meet

the requirements of section 142(d)(4)(B). Once made, the

election is irrevocable.

Privacy Act and Paperwork Reduction Act Notice. We

ask for the information on this form to carry out the Internal

Revenue laws of the United States. Claiming this credit is

voluntary; however, if you do claim the credit, sections 42,

6001, and 6011 require you to provide this information.

Section 6109 requires you to provide your taxpayer

identification number (SSN, EIN, or ITIN). We need this

information to ensure that you are complying with the revenue

laws and to allow us to figure and collect the right amount of

tax. We may disclose this information to the Department of

Justice for civil or criminal litigation, and to cities, states, the

District of Columbia, and U.S. commonwealths and territories

for use in administering their tax laws. We may also disclose

this information to other countries under a tax treaty, to

federal and state agencies to enforce federal nontax criminal

laws, or to federal law enforcement and intelligence agencies

to combat terrorism. Failure to provide this information may

delay or prevent processing of your claim. Providing false

information may subject you to penalties.

You are not required to provide the information requested

on a form that is subject to the Paperwork Reduction Act

unless the form displays a valid OMB control number. Books

or records relating to a form or its instructions must be

retained as long as their contents may become material in the

administration of any Internal Revenue law.

The time needed to complete and file the form will vary

depending on individual circumstances. The estimated

average time is:

Learning about the law or the form . . . . . . . .

Recordkeeping . . . . . . . . . . . . . . . . . . . .

Preparing and sending the form to the IRS . . .

4 hr., 10 min.

10 hr., 45 min.

4 hr., 31 min.

If you have comments concerning the accuracy of these

time estimates or suggestions for making these forms

simpler, we would be happy to hear from you. You can send

your comments through IRS.gov/FormsPubs. Click on “Help

with Forms and Instructions” and then on “Give us feedback.”

Or you can send your comments to the Internal Revenue

Service, Tax Forms and Publications, 1111 Constitution Ave.

NW, IR-6526, Washington, DC 20224. Do not send the tax

form to this office. Instead, see Filing Requirement, earlier.

Instructions for Form 8609 (12-2025)