Historic Rehabilitation Tax Credit Services
KWC offers Historic Rehabilitation tax credit services, including projections for structuring, cost certification and tax return preparation. We can assist you in navigating the associated rules and regulations for claiming federal and state tax credits for your rehabilitation project and ensure you meet the compliance standards.
Historic Rehabilitation tax credits are reductions (on a dollar-for-dollar basis) in income tax liability for taxpayers involved in the rehabilitation of historic buildings. In addition to credits available from Virginia, rehabilitation credits are also available through the federal government. The amount of the credit is based on total rehabilitation costs. The federal credit is 20% of qualified rehabilitation expenses (QRE’s). The Virginia credit is 25% of QRE’s. In some cases, taxpayers can qualify under both programs, allowing them to claim credits of 45% of their QRE’s.
The federal program offers the following tax credit options (Note: a taxpayer may be eligible for one but not both of the federal credits)
- A 20% income tax credit is available for rehabilitation of certified historic income-producing structures
- A 10% tax credit is available for the rehabilitation of non-historic buildings constructed before 1936 (rehabilitated for non-residential use)
The Virginia tax credit is 25% of QRE’s incurred in the rehabilitation.
Taxpayers may qualify under both the state and federal programs, allowing them to take credits of up to 45% of eligible expenses associated with the rehabilitation project, if the property is income producing. Taxpayers can qualify for Virginia credits only on a personal residence.
According to the Virginia Department of Historic Resources website:
Under the federal program, a certified historic structure is one that is either:
- Listed individually on the National Register of Historic Places, or
- Certified as “contributing” to a district that is so listed.
Under the state program, a certified historic structure is one that is:
- Individually listed on the Virginia Landmarks Register, or
- Certified as eligible for listing, or
- Certified as a contributing structure in a district that is so listed
To learn more about the federal rehabilitation standards and guidelines visit the Secretary of the Interior’s Standards for Rehabilitation web page.
Additional tax credits that we can assist with include:
- Virginia Enterprise Zone
- Opportunity Zone
- Low Income Housing Tax Credits
- Renewable Energy Investment Tax Credits
For more information on KWC’s Tax Credit Services contact: Catherine Stemple , Joanna Friedman
KWC specializes in providing tax, audit, accounting and business advisory services for businesses, individuals, estates, trusts, non-profit organizations, and employee benefit plans. Our diverse client base served includes industries such as professional service firms, government contractors, non-profits, real estate, construction and specialty contractors, and healthcare providers.