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federalUnited StatesLow-Income Housing Tax Creditset_aside
Average income designations must be made and must average 60% or less
lihtc.set_aside.average_income_designation · v1.0.0
Under the average income test each low-income unit must be designated at 20, 30, 40, 50, 60, 70 or 80 percent of area median gross income, and the average of the designated imputed income limitations across the units in the qualified group must not exceed 60 percent.
Average income is the highest-variance area of LIHTC compliance. Treat state overlay ingestion as mandatory before auditing an AIT property.
- Confidence
- high
- Effective from
- 2018-03-23
- Last reviewed
- 2026-08-22
Evidence required
- Land Use Restriction Agreement / Extended Use Agreement(at_least_one)
- Tenant Income Certification(one_per_unit)
Citations
All sources verified within 1 day- Internal Revenue Code Section 42 - Low-income housing credit42(g)(1)(C)
- Average income test26 CFR 1.42-19(a), Average income set-aside