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federalUnited StatesLow-Income Housing Tax Creditutility_allowance
No review or implementation is required until the building reaches 90 percent occupancy for 90 consecutive days or the end of the first credit year
lihtc.ua.first_year_review_and_implementation_deferral · v1.0.0
The building owner is not required to review the utility allowances, or to implement new utility allowances, until the building has achieved 90 percent occupancy for a period of 90 consecutive days or the end of the first year of the credit period, whichever is earlier. Because the deferral ends at the earlier of the two, a slow-leasing building still owes a review at the end of its first credit year. Where the review is completed at the end of that year, the IRS reads the consequence forward: the 90-day period then begins no later than 1 March of the following year.
Kentucky encodes this deferral explicitly at the state layer (ky.lihtc.utility_allowance_annual_review_90day_rent_implementation). Most agencies do not, which means a new building's first missed review is a recurring false positive in monitoring unless this rule is consulted.
- Confidence
- high
- Effective from
- 2008-07-29
- Last reviewed
- 2026-08-31
Citations
All sources verified within 1 day- Utility allowances26 CFR 1.42-10(c)(1), last sentence
- Guide for Completing Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance or Building DispositionPub. 5913 (1-2024), Category 11m, A.7(2)