Federal Rehabilitation Investment Tax Credits (RITCs)

Under the RITC program, certain expenses incurred in connection with rehabilitating an old building, which is income-producing, are eligible for a tax credit.  There are two rates - 20% for a historic building and 10% for a non-historic building, with different qualifying criteria for each rate.

 

 

 

 

 

 

 

 

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Twenty Percent (20%) Tax Credit:  

  • Building must be listed on the National Register or be a contributing building to a Certified Local District (a locally designated historic district that has been certified by the National Park Service).
  • Building must be used for income producing purposes.
  • Rehabilitation work must be in accordance with the Secretary of the Interior's Standards for Rehabilitation.
  • Project must meet “substantial rehabilitation test” –amount spent on rehabilitation must exceed the adjusted basis of the building or $5,000, whichever is greater.  
  • Post-rehabilitation building to be owned by same owner and operated as income-producing property for 5 years.

Ten Percent (10%) Tax Credit:

  • Building must be built before 1936 and be non-historic.
  • Building cannot be used for rental residential purposes.
  • Building must meet Wall Retention Requirement:  (i)50% or more of the building’s external walls remaining as exterior walls; (ii) 75% or more of the building’s external walls retained as exterior or interior walls; and (iii) 75% or more of the building’s internal structural framework remaining in place.
  • Project must meet “substantial rehabilitation test” - amount spent on rehabilitation is greater than adjusted basis of the building and is at least $5,000.
  • Post-rehabilitation building to be owned by same owner and operated as income-producing property for 5 years.

The Pennsylvania Historical and Museum Commission serves as the State Historic Preservation Office and administers the RITC program in partnership with the National Park Service and the Internal Revenue Service. 

Is your rehabilitation project eligible for RITCs? 

 

 

 

 

 

 

Enterprise Zone Tax Credit Program

 

Company Tax ID

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Did you know that you may be eligible to apply for tax credits under the Enterprise Zone Tax Credit Program administered by the Pennsylvania Department of Community and Economic Development?  Tax credits are available to private companies which make qualified investments to rehabilitate, expand and/or improve buildings or land which promote community economic development and which occur in areas designated as a state Enterprise Zone.  Per DCED's guidelines for the Enterprise Zone Tax Credit program, tax credits are authorized in the amount of 25% of funds invested, up to a maximum of $500,000.

The deadline for submitting an application is August 15, 2011.  Do you intend to rehabilitate, expand or improve a building or land located in a designated Enterprise Zone?  Will the rehabilitation or improvement create or retain jobs?  If so, now is the time to find out whether your project is eligible for these tax credits.