IRS Announces LIHTC, Bond Caps for 2024
The increase for the 2024 per-capita multiplier ties the record set last year for the largest year-over-year increase without legislative cause since 2003.
The Internal Revenue Service recently released Revenue Procedure 2023-34, which provides the 2024 per-capita and small-state minimum levels for the Low Income Housing Tax Credit and Private Activity Bonds.
One level deeper: By statute, a state only receives an allocation of LIHTCs on a per-capita basis. In other words, the pool of 9 percent credits in any given year is limited. For each state, the annual volume cap for 9 percent tax credits is measured as the product of a fixed per-capita rate multiplied by the state’s population.
The credits are allocated by state housing credit agencies through a competitive process. Federal law requires each state housing agency [?] to have a qualified allocation plan (QAP), which sets out the state’s priorities and eligibility criteria for awarding 9 percent tax credits as well as state tax-exempt private activity bonds.
The bottom line: In 2024, there will be an increase in the low-income housing tax credit (LIHTC) and private-activity bond caps for 2024. The amount used to calculate the 9 percent LIHTC state ceiling will be the greater of $2.90 multiplied by the state population or $3,360,000. And the state minimum receives a $175,000 increase, up from $3,185,000 this year.
This year’s the per-capita multiplier is $2.75. The 15 cent increase for the 2024 per-capita multiplier ties the record set last year for the largest year-over-year increase without legislative cause since 2003, when the credit began being adjusted for inflation. The only 9 percent per-capita increases higher than the 2023 and 2024 figures were due to legislative increases, the Housing and Recovery Act in 2009 and the Consolidated Appropriations Act of 2018.
On the private-activity bond side, the amounts used to calculate the state ceiling will be the greater of $125 multiplied by the state population, or $378,230,000. That’s an increase from this year’s $120 per capita multiplier and the $358,845,000 state minimum.