Allocation Date vs. Placed-in-Service Date
The "allocation date" is the date your state housing agency allocated or committed tax credits to the owner for the site. The "placed-in-service" (PIS) date marks the first day the owner can begin qualifying units at the site as low-income units to claim its tax credits.
For new construction or substantially rehabilitated sites, the PIS date is the date of the certificate of occupancy. For rehabilitation of existing buildings that’s not substantial—meaning that the work may be accomplished with residents still living in the building—the owner chooses the PIS date. In some cases, however, you must get your state housing agency's approval. This date applies whether or not the building is occupied during the rehabilitation period. For these types of rehabilitation projects, the IRS says this date must be within two years of the date the owner first begins expensing the project for tax purposes. For example, if the owner begins expensing the project for tax purposes on April 1, 2012, the last date the owner may choose for a PIS date would be March 31, 2014.
And, of course, since the owner can't claim credits that haven't been allocated, the PIS date always follows the allocation date.
Also, each tax credit site has only one allocation date. But sites with more than one building may have more than one PIS date. Whether to place some buildings in service earlier than others is up to the owner, which must make its decision by the time it completes IRS Form 8609.
The PIS date must occur by the end of the second calendar year following the allocation date. The PIS date is important because it determines when the credit and compliance periods begin and end. These periods must begin either with the year a building is placed in service or the following year, at the latest. If you confuse the allocation date with the PIS date, you may stop complying too soon—that is, 15 years after the allocation date, which is a big mistake. Or you may start complying and have the owner claim tax credits too soon, instead of waiting until the site gets a certificate of occupancy.