IRS Form 8609 – Low-Income Housing Credit Allocation and Certification

IRS Form 8609 – The Low-Income Housing Tax Credit (LIHTC) program is a vital tool for promoting affordable housing in the United States. At the heart of this program is IRS Form 8609, which serves as both an allocation document and a certification for low-income housing credits. This article provides a comprehensive, up-to-date overview of Form 8609, including its purpose, filing requirements, and step-by-step instructions. Whether you’re a building owner, developer, or housing agency, understanding this form is essential for claiming tax credits effectively.

For the official PDF of Form 8609, you can download it directly from the IRS website: https://www.irs.gov/pub/irs-pdf/f8609.pdf.

What Is IRS Form 8609?

IRS Form 8609, titled “Low-Income Housing Credit Allocation and Certification,” is used to allocate and certify low-income housing tax credits for residential rental buildings that meet specific affordability criteria. It allows owners to claim credits over a 10-year period for buildings that provide housing to low-income tenants. A separate Form 8609 must be issued for each qualified building in a project, even if multiple buildings are involved.

The form is divided into two main parts:

  • Part I: Allocation of Credit – Completed by the state or local housing credit agency.
  • Part II: First-Year Certification – Completed by the building owner in the first year of the credit period.

As of 2026, the form’s latest revision is from December 2021, with instructions updated in December 2025. There are no significant recent developments or changes reported for 2026.

Purpose of Form 8609

The primary goal of Form 8609 is to facilitate the allocation of housing credits under Section 42 of the Internal Revenue Code. It ensures that credits are only given to buildings that comply with low-income housing requirements, such as rent restrictions and tenant income limits.

Key purposes include:

  • Obtaining a credit allocation from a housing credit agency.
  • Certifying the building’s eligible basis and qualified basis for the first year.
  • Enabling owners to claim the credit annually via related forms like Form 8609-A.

Credits are allocated based on factors like the building’s qualified basis, applicable credit percentage, and whether it’s in a high-cost area. Special rules apply for tax-exempt bond-financed projects, where no formal allocation is needed if at least 50% of the basis is bond-financed, but a Form 8609 with a BIN is still required.

Who Must File Form 8609?

  • Housing Credit Agencies: Complete and sign Part I to allocate credits. They must file a copy with their annual report on Form 8610.
  • Building Owners: Complete Part II for certification and submit the entire form (with attachments) to the IRS once, by the due date of their first tax return claiming the credit.

Owners of low-income rental buildings, including those in multiple-building projects, must use this form to claim credits. Nonprofits and partnerships may have additional considerations, such as the 90% nonprofit set-aside limit.

When and Where to File?

  • Agency Filing: Send the original signed Form 8609 to the owner after completing Part I. Submit a copy with Form 8610 to the IRS.
  • Owner Filing: File once with the IRS at the Philadelphia campus (Department of the Treasury, Internal Revenue Service Center, Philadelphia, PA 19255-0549) by the due date (including extensions) of the tax return for the first year the credit is claimed.

Allocations must generally be made by the end of the calendar year the building is placed in service, with exceptions for carryover allocations, increases in basis, or disaster relief extensions. For buildings in qualified disaster zones with 2021-2022 allocations, deadlines may be extended.

Recordkeeping is crucial: Owners must retain copies for at least three years after the end of the 15-year compliance period.

How to Complete Form 8609: Step-by-Step Instructions?

Part I: Allocation of Credit (Agency Only)

This section includes:

  • Header: Check boxes for additions to qualified basis or amended forms. Provide building address, agency details, owner info, and BIN.
  • Line 1a: Date of allocation.
  • Line 1b: Maximum housing credit dollar amount.
  • Line 2: Applicable credit percentage (minimum 4% for certain buildings placed in service after 2020; 9% for non-subsidized new buildings).
  • Line 3a: Maximum qualified basis.
  • Line 3b: High-cost area percentage increase (up to 130%).
  • Line 4: Percentage financed by tax-exempt bonds.
  • Line 5a: Placed-in-service date (completed in Part II).
  • Line 5b: Check for qualified disaster zones.
  • Line 6: Check boxes for building type (e.g., new construction, existing, subsidized).

The agency signs under penalties of perjury.

Part II: First-Year Certification (Owner Only)

  • Line 7: Eligible basis of the building.
  • Line 8a: Original qualified basis.
  • Line 8b: Check “Yes” if treating as part of a multiple-building project (irrevocable; requires attachment).
  • Line 9a: Election to reduce basis for tax-exempt bonds.
  • Line 9b: Election for disproportionate costs in market-rate units.
  • Line 10a: Election to begin credit period next year.
  • Line 10b: Partnership recapture election.
  • Line 10c: Minimum set-aside election (e.g., 20-50, 40-60, average income).
  • Line 10d: Deep rent skewed election.

The owner signs, declaring accuracy.

For amended forms, explain changes. Consult the full instructions for detailed calculations, such as qualified basis (eligible basis times the smaller of unit or floor space fraction).

Recent Updates for 2026

As of February 2026, there are no new developments for Form 8609. However, ongoing reminders include:

  • A minimum 4% credit rate for qualifying buildings allocated after 2020 or financed with post-2020 bonds.
  • Extensions for carryover allocations and placed-in-service deadlines in disaster areas.
  • COVID-19 relief measures from prior notices (e.g., Notice 2021-12) may still apply to older projects.

The IRS is soliciting comments on Forms 8609 and 8609-A through March 2026, potentially leading to future revisions.

  • Form 8609-A: Annual compliance statement for the 15-year period.
  • Form 8586: To claim the low-income housing credit on your tax return.
  • Form 8610: Agencies’ annual report.
  • Form 8611: For credit recapture.

For more details, visit the IRS website or consult a tax professional. This guide is for informational purposes only and does not constitute tax advice. Always verify with current IRS guidelines to ensure compliance.