Historic Structures Rehabilitation Tax Credit
Conn. Gen. Stat. §10-416a
After June 30, 2014, no applications may be filed and no credits will be reserved under this program. Projects that previously would have been eligible for a credit under this program may be eligible for a credit under the Historic Rehabilitation Tax Credit program.
Description and Applicable Taxes
A tax credit administered by the Connecticut Department of Economic and Community Development (DECD) is available to an owner rehabilitating a certified historic structure for residential use or to a taxpayer named by the owner as contributing to the rehabilitation. No credit may be claimed before DECD issues a tax credit voucher.
This tax credit may be applied against the taxes imposed under:
- Chapter 207 (Insurance Companies and Health Care Centers Taxes);
- Chapter 208 (Corporation Business Tax);
- Chapter 209 (Air Carriers Tax);
- Chapter 210 (Railroad Companies Tax);
- Chapter 211 (Community Antenna Television Systems and One-Way Satellite Transmission Business Tax); and
- Chapter 212 (Utility Companies Tax).
Definitions
Owner means any person, firm, municipality, limited liability company, nonprofit or for-profit corporation or other business entity which possesses title to an historic structure and undertakes the rehabilitation of such structure.
Certified historic structure means an historic commercial, industrial,
former municipal, state or federal government, cultural, institutional, or
residential property of more than four units, that:
- Is listed individually on the National or State Register of Historic Places; or
- Is located in a district listed on the National or State Register of Historic Places and has been certified by the State Historic Preservation Officer as contributing to the historic character of such district.
Qualified rehabilitation expenditures means any costs incurred for the physical construction involved in the rehabilitation of a certified historic structure for residential uses, but excludes:
- The owner’s personal labor;
- The cost of the new addition, except as may be required to comply with any provision of the State Building Code or the State Fire Safety Code; and
- Any non-construction costs such as architectural fees, legal fees, and financing fees.
Substantial rehabilitation means the qualified rehabilitation expenditures of a certified historic structure that exceed 25% of the assessed value of the structure.
Tax Credit Amount
The tax credit is equal to the lesser of the tax credit reserved upon certification of the rehabilitation plan or 25% of the actual qualified rehabilitation expenditures not exceeding $2.7 million. The amount of the tax credit that may be claimed will be entered on the tax credit voucher issued by DECD.
Carryforward and Carryback Limitations
The tax credit may be carried forward for five years following the year in which the rehabilitated structure was placed in service. No carryback is allowed.
How to Apply
Prior to any rehabilitation work taking place, the owner must submit a rehabilitation plan to DECD along with an estimate of the qualified expenditures. DECD will certify the plan and reserve credits equal to 25% of the projected expenditures, not to exceed $2.7 million.
Once the substantially rehabilitated structure is placed in service, DECD verifies the owners’ compliance with the rehabilitation plan and, following such verification, issues a credit voucher. In the case of projects completed in phases, the tax credit is prorated to the identifiable portion of the substantially rehabilitated building placed in service.
Applications for tax credit voucher must be made with DECD. Contact DECD at 860-256-2756 for application information.
How to Claim the Tax Credit
The amount listed on the tax credit voucher must be entered on Form CT-1120HS, Historic Structures Rehabilitation Tax Credit. Form CT-1120HS must be attached to Form CT-1120K, Business Tax Credit Summary, and/or Form CT-207K, Insurance/Health Care Tax Credit Schedule.
The tax credit shall be claimed in the tax year in which the rehabilitated certified historic structure is placed in service. If the project is completed in phases then a pro rata portion of the tax credit is available in the year in which an identifiable portion of the rehabilitated certified historic structure is placed in service.
Assignment and Transfer
Any owner allowed this tax credit (assignor) may assign the tax credit, in whole or in part, to any individual or entity (assignee). An assignee may not further assign the tax credit. An assignee must claim the tax credit in the same year in which the assignor would have been eligible to claim the tax credit.
Insurance Companies and Health Care Centers: In addition to the assignments that are permitted under the specific provisions of this tax credit statute, this credit may also be assigned by an insurance company or health care center to an affiliate provided that the affiliate may only apply the assigned credit against its tax liability under Chapter 207 (Insurance Companies and Health Care Centers Taxes).
Flow Through of the Tax Credit
Any tax credits that are provided to multiple owners of certified historic structures shall be passed through to persons designated as partners, members, or owners, either pro rata or according to an agreement among such persons.
Where to Get Additional Information
Direct inquiries to:
Connecticut Department of Economic and Community Development
State Historic Preservation Office
One Constitution Plaza Office, 2nd Floor
Hartford CT 06103
860-256-2756
www.cultureandtourism.org
Statutory and Regulatory References
Conn. Gen. Stat. §10-416a; Conn. Agencies Regs. §§10-416a-1 through 10-416a-12
Last updated January 25, 2017