Owners of low-income rental buildings can get a low-income housing credit for each building over a 10-year period, with Form 8609 being used to claim allocations from the housing credit agency and certify certain information. This article explains the details of allocated credit and how Form 8609 works.
What is Form 8609?
Form 8609 is an official document used by the owners of residential low-income rental buildings to obtain a low-income housing credit allocation from their housing credit agency. This document is necessary to certify certain information related to the building (such as building identification number) and to calculate the available credit based on multiple factors (such as its location, size, and connection to tax-exempt bonds). Form 8609 must be issued for each building in a multiple building project, and separate forms must be completed for different allocations of credit.
IRS Form 8609 – Who Needs to Fill It Out?
Individuals or entities such as owners of residential low-income rental buildings who wish to obtain a housing credit allocation from the housing credit agency must fill out Form 8609. In order to do so, they must have first been assigned a Building Identification Number (BIN) by the housing credit agency. They must also receive an allocation of credit from the agency, which is typically made by the close of the calendar year in which the building is placed in service. However, exceptions have been made under certain circumstances, such as for an advance binding commitment, an increase in qualified basis, a building placed in service within two (or three) years in a qualified disaster area, or when a project includes more than one building. Land functionally related and subordinate to the building must also be taken into account when receiving the credit allocation. All these conditions must have been met in order for Form 8609 to be filled out and submitted to the housing credit agency.
Step-by-Step: Form 8609 Instructions For Filling Out the Document
To complete Form 8609, owners of residential low-income rental buildings must obtain a housing credit allocation from a state or local housing credit agency, which is authorized to make such allocations within its jurisdiction. Owners must also use the building identification number (BIN) initially assigned to the building, as well as certify certain information. Credit can be allocated only to buildings located within the agency’s geographical jurisdiction. To receive an allocation, the building must be placed in service by the close of the calendar year. In some cases, the deadline may be extended under certain conditions. As well, separate Forms 8609 must be filed for each building to which an allocation of credit is made, including separate forms for a single building receiving allocations from multiple years or different uses. Tax-exempt bonds do not require an allocation in most cases.
Below, we present a table that will help you understand how to fill out Form 8609.
| Information Required for Form 8609 | Details |
|---|---|
| Filing Requirement | Required for owners of residential low-income rental buildings |
| Building Identification Number (BIN) | Use the initially assigned BIN for the building |
| Allocation | Separate forms for each building receiving allocations |
| Tax-Exempt Bonds | Most cases do not require allocation |
Do You Need to File Form 8609 Each Year?
Yes, each year owners of residential low-income rental buildings must file Form 8609 to obtain a housing credit allocation from the housing credit agency in which their building is located. This must be done within the calendar year the building is placed in service to receive credit for that year. For multiple building projects and buildings with separate credit allocations, a separate Form 8609 must be issued for each. Tax-exempt bonds also require a separate Form 8609, unless at least 50% of its basis is financed with the bond. Additionally, for buildings meeting the 10% test, owners have an extended period to obtain an allocation of credit.
Download the official IRS Form 8609 PDF
On the official IRS website, you will find a link to download Form 8609. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 8609
Sources:
