To amend the Internal Revenue Code of 1986 to allow 5-year carrybacks for the low-income housing tax credit.

Overview

HR 9012, introduced in the 119th Congress, would amend the Internal Revenue Code of 1986 to allow a five-year carryback for the low-income housing tax credit (LIHTC). The bill has two Senate-style sponsors as House co-sponsors: Jimmy Panetta and Mike Carey. It was introduced and referred to the House Committee on Ways and Means on May 22, 2026.

Primary purpose and intent

• To provide immediate liquidity to developers and owners of qualified low-income housing by permitting a five-year carryback of LIHTC amounts.
• The aim is to enhance financing opportunities for LIHTC projects, potentially accelerating construction, preserving affordable housing stock, and reducing project financing gaps during downturns or periods of tight credit.

Key provisions

• Creation of a five-year carryback for LIHTCs:
  • Taxpayers claiming LIHTCs could elect to apply eligible credits to prior tax years (up to five years back) rather than solely to the current year.
  • Carried-back credits would reduce tax liability in the carryback years, potentially generating refundable or indemnified tax benefits depending on prior-year tax attributes and limitations.
• Implementation mechanics (general outline, specifics may be refined in the bill text):
  • Election and timing: Taxpayers would opt into the five-year carryback mechanism, subject to any IRS rules and guidance.
  • Limitations: Provisions would likely address the order of operations, attribution rules, and any carryback limitations consistent with existing credit mechanisms.
  • Interaction with other credits and credits carryforwards: Provisions would define how LIHTC carrybacks interact with other tax credits and with any existing carryforwards or carrybacks.
• Administrative and compliance considerations:
  • IRS reporting requirements to claim and track carryback credits.
  • Documentation standards to verify LIHTC eligibility in carryback years.

Who would be affected

• Qualified LIHTC developers and owners who claim the LIHTC on their tax returns.
• Taxpayers (owners/developers) with LIHTC projects who could benefit from accelerated tax benefits by applying credits to prior years.
• Potentially, lenders and investors in affordable housing projects, who rely on LIHTC equity and project viability.

Potential impacts

• Financial: Short-term liquidity boost for LIHTC projects via accelerated tax benefits, which could improve project feasibility and financing terms.
• Housing policy impact: May support the development and preservation of affordable housing by reducing financing gaps.
• Tax administration: Additional complexity in tax filings due to carryback elections; requires IRS guidance and potential updates to form instructions and processing systems.

Procedural/timeline notes

• Referral: House Committee on Ways and Means (May 22, 2026).
• Next steps: Committee consideration, potential passage by the House, and movement through the Senate, with standard tracking of amendments and fiscal impact analyses.
• Fiscal implications: The bill would need a corresponding budgetary and revenue estimate to evaluate net effect on the federal fisc and any impact on LIHTC program allocation.

This summary captures the bill’s stated objective to provide a five-year LIHTC carryback and its likely effects on taxpayers, housing projects, and tax administration. The exact statutory language will clarify mechanics, limitations, and any interplay with existing LIHTC rules.