Code of the District of Columbia

Chapter 48. District of Columbia Low-Income Housing Tax Credit


§ 47–4801. Definitions.

For the purposes of this chapter, the term:

(1) “Administrative costs” means the costs of the Department to administer, manage, and monitor the Low-Income Housing Tax Credit Program, including personnel costs.

(2) “Department” means the Department of Housing and Community Development, or its successor agency.

(3) “Developer” means a person or entity that proposes to cause the construction of affordable housing using tax credits provided under the District of Columbia’s Low-Income Housing Tax Credit Program.

(4) “Director” means the Director of the Department.

(5) “District of Columbia low-income housing tax credit” means the tax credit established by § 47-4802 pursuant to the Low-Income Housing Tax Credit Program.

(6) “Low-Income Housing Tax Credit Program” means the program authorized by section 42 of the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C. § 42) (“1986 Internal Revenue Code”).

(7) “Pilot period” means the initial year of the credit program established under this chapter.

(8) “Qualified project” means a rental housing development that receives an allocation of federal Low-Income Housing Tax Credits from the Department.

(9) “User fee” means a fee charged by the Department to a developer in connection with the District of Columbias [sic] Low-Income Housing Tax Credit Program, including application, reservation, allocation, and monitoring fees.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)

Emergency Legislation

For temporary (90 days) addition of this chapter, see § 7152 of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696).

For temporary (90 days) addition of this chapter, see § 7142 of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188).

For temporary (90 days) addition of this chapter, see § 7142 of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).

For temporary (90 days) amendment of this section, see § 2(b) of the ABLE Program Trust Establishment Emergency Act of 2015 (D.C. Act 21-161, Oct. 19, 2015, 62 DCR 13725).


§ 47–4802. Credit established.

(a)(1) There is established a District of Columbia low-income housing tax credit. Subject to available funds, the Department may authorize annually under this chapter total tax credits equal to the credit ceiling allocated to the District of Columbia by the federal Internal Revenue Service in accordance with 26 U.S.C. § 42(h)(3)(c).

(2) For the pilot period, the Department shall make available $1 million in credits in tax year 2017.

(b) Unless otherwise provided in this section, the Department shall authorize, allocate, administer, and determine eligibility for the District of Columbia low-income housing tax credit and allocate the credit in accordance with the standards and requirements as set forth in section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year; provided, that the combined federal and District of Columbia low-income housing tax credit shall be the least amount necessary to ensure financial feasibility of a project.

(c) The Department shall allocate the total available District of Columbia low-income housing tax credit among as many qualified District of Columbia projects as fiscally feasible, with the goal of increasing the stock of affordable housing units.

(d) Only qualified projects are eligible for a District of Columbia low-income housing tax credit award.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990; Oct. 22, 2015, D.C. Law 21-36, § 7047, 62 DCR 10905; Oct. 8, 2016, D.C. Law 21-160, § 7132, 63 DCR 10775.)

Effect of Amendments

The 2015 amendment by D.C. Law 21-36 substituted “tax year 2016” for “tax year 2015” in (a)(2).

Emergency Legislation

For temporary (90 days) amendment of this section, see § 7017 of the Fiscal Year 2016 Budget Support Emergency Act of 2015 (D.C. Act 21-127, July 27, 2015, 62 DCR 10201).


§ 47–4803. Eligibility.

(a) A taxpayer may receive a District of Columbia low-income housing tax credit with respect to a qualified project; provided, that the Department issues an eligibility statement for that qualified project.

(b) The total District of Columbia low-income housing tax credit available to a qualified District of Columbia project shall be authorized and allocated by the Department based on the qualified project’s need for the credit for economic feasibility.

(c) The District of Columbia low-income housing tax credit shall be taken against the income, insurance premium, or franchise taxes imposed under this title, claimed equally for 10 years, subtracted from the amount of District of Columbia tax otherwise due for each taxable period and shall not be refundable; provided, that the credit may not be taken against any tax that is dedicated in whole or in part to the Healthy DC and Health Care Expansion Fund established by § 31-3514.02. Any amount of the low-income housing tax credit that exceeds the tax due for a taxable year may be carried forward to any of the 10 remaining subsequent taxable years.

(d)(1) All or any portion of District of Columbia tax credits issued in accordance with the provisions of this section may be allocated to parties who are eligible under the provisions of subsection (a) of this section.

(2) An owner of a qualified project shall certify to the Chief Financial Officer the amount of credit allocated to the owner. The owner of the qualified project shall provide to the Chief Financial Officer appropriate information so that the low-income housing tax credit can be properly allocated.

(e) If the recapture of District of Columbia low-income housing tax credits is required pursuant to § 47-4804(a) or (b), any statement submitted to the Chief Financial Officer as provided in this section shall include the:

(1) Proportion of the District of Columbia credit required to be recaptured;

(2) Identity of each taxpayer subject to the recapture; and

(3) Amount of credit previously allocated to such taxpayer.

(f)(1) A tax credit allowed under this section shall not be denied to the taxpayer with respect to any qualified project merely by reason of a right of first refusal held by the tenants, in cooperative form or otherwise, or resident management corporation of such building or by a qualified nonprofit organization, as defined in section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year, or government agency to purchase the qualified District of Columbia project after the close of the compliance period for a price which is not less than the minimum purchase price determined under paragraph (2) of this subsection.

(2) The minimum purchase price shall be an amount equal to the sum of the principal amount of outstanding indebtedness secured by the building, other than indebtedness incurred within the 5-year period ending on the date of the sale pursuant to paragraph (1) of this subsection, and all federal and District taxes attributable to the sale.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)


§ 47–4804. Recapture.

(a) The owner of a qualified project eligible for the District of Columbia low-income housing tax credit shall submit a copy of the eligibility statement issued by the Department with respect to the qualified project at the time of filing the project owner’s state tax return. In the case of failure to attach the eligibility statement, a credit under this section shall not be allowed with respect to such qualified project for that year until the copy is provided to the Office of Tax and Revenue.

(b) If under section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year, a portion of any federal low-income housing tax credits taken on a low-income qualified project is required to be recaptured, the District of Columbia low-income housing tax credit authorized by this chapter with respect to such qualified District of Columbia project shall also be recaptured. The District of Columbia recapture amount shall be equal to the amount of the District of Columbia low-income housing tax credits previously claimed times a fraction, the numerator of which shall be the amount of recaptured federal low-income housing tax credits and the denominator of which shall be the amount of federal low-income housing tax credits previously claimed.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)


§ 47–4805. Additional filings.

The Chief Financial Officer or the Department may require the filing of additional documentation necessary to determine the eligibility or accuracy of a tax credit claimed under the provisions of this chapter through the promulgation of regulations.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)


§ 47–4806. Transfer, sale, or assignment.

(a) All or any portion of tax credits issued in accordance with the provisions of this section may be transferred, sold, or assigned.

(b) An owner or transferee desiring to make a transfer, sale, or assignment shall submit to the Chief Financial Officer a statement that describes the amount of District of Columbia low- income housing tax credit for which such transfer, sale, or assignment of District of Columbia low-income housing tax credit is eligible. The owner shall provide to the Chief Financial Officer appropriate information so that the low-income housing tax credit can be properly allocated.

(c) If the recapture of District of Columbia low-income housing tax credits is required pursuant to§ 47-4804, any statement submitted to the Chief Financial Officer as required in subsection (b) of this section shall include the:

(1) Proportion of the District of Columbia low-income housing tax credit required to be recaptured;

(2) Identity of each transferee subject to recapture; and

(3) Amount of credit previously transferred to such transferee.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)


§ 47–4807. Compliance.

(a) The Department, in consultation with the Chief Financial Officer, shall monitor and oversee compliance with the District of Columbia’s Low-Income Housing Tax Credit Program and may promulgate regulations requiring the filing of additional documentation considered necessary to determine continuing eligibility for the District of Columbia low-income housing tax credit.

(b) The Department or the Chief Financial Officer shall report specific occurrences of noncompliance to appropriate state, federal, and local authorities.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)


§ 47–4808. Expiration of credits.

Except for unused credits carried forward pursuant to § 47-4803(c) and for credits claimed under regulations promulgated by the Department consistent with the special rule set forth in section 42(f)(2) of the 1986 Internal Revenue Code , as amended and in effect for the taxable year, a qualified District of Columbia project shall not be eligible for any District of Columbia low-income housing tax credits for more than 11 taxable years.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)


§ 47–4809. Efficiency.

The Department may pursue methods of enhancing the efficiency of the District of Columbia low-income housing tax credit program, including,

(1) Pursuing opinions from the United States Department of Treasury’s Internal Revenue Service in the form of:

(A) General Counsel memoranda;

(B) Private letter rulings and other notices,:

(C) Rulings; or

(D) Guidelines; and

(2) Reviewing other state low-income housing tax programs that have an option for taxpayers to receive such tax credit in the form of a loan generated by transferring the credit to a designated state entity.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)


§ 47–4810. Fees.

The Department may charge a user fee equal to up to 1% of the District of Columbia low-income housing tax credits awarded to a qualified project to pay for the administrative costs associated with the establishment of a District of Columbia low-income housing tax credit. The user fee shall be deposited into the Low-Income Housing Tax Credit Fund, as established in § 42-2853.02.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)

Emergency Legislation

For temporary (90 days) addition of § 47-4811.01, concerning the ABLE Program Trust [see now § 47-4902], see § 2(c) of the ABLE Program Trust Establishment Emergency Act of 2015 (D.C. Act 21-161, Oct. 19, 2015, 62 DCR 13725).


§ 47–4812. Rules.

(a) The Mayor shall issue rules to implement the provisions of this chapter.

(b) The Chief Financial Officer shall issue rules to implement § 47-4805.


(Feb. 26, 2015, D.C. Law 20-155, § 7142(b), 61 DCR 9990.)