O F F I C E O F L E G I S L A T I V E R E S E A R C H
P U B L I C A C T S U M M A R Y
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PA 24-109—sHB 5190
Commerce Committee
AN ACT CONCERNING TH E HISTORIC HOMES REH ABILITATION
TAX CREDIT
SUMMARY: This act restores taxpayers’ ability to apply historic homes
rehabilitation tax credits against specified business taxes. By law, the Department
of Economic and Community Development (DECD) issues these credits, subject to
certain requirements, to (1) people and nonprofits who own, rehabilitate, and
occupy historic homes or (2) businesses that contribute funds for rehabilitating
historic homes that are or will be occupied by their owners.
PA 23-204, § 357, eliminated taxpayers’ ability to claim credits issued on or
after January 1, 2024, against specified state business taxes (i.e., the insurance
premiums, corporation business, air carriers, railroad companies, cable and satellite
TV companies, and utility companies’ taxes). The act instead allows taxpayers to
continue claiming these credits against these specified business taxes. As under
existing law, credits issued on or after that date may also be claimed against the
personal income tax and unrelated business income tax.
The act allows taxpayers applying the credit against any of the business taxes
mentioned above to carry forward any unused credits for up to four income years,
just as existing law allows for nonprofit corporations claiming the credit against the
unrelated business income tax. Under existing law, credits applied against the
personal income tax are refundable.
EFFECTIVE DATE: July 1, 2024, and applicable to tax and income years
beginning on or after January 1, 2024.
BACKGROUND
Historic Homes Rehabilitation Tax Credit
Under this program, qualifying property owners (people and nonprofits) may
receive a tax credit for 30% of the construction costs they incur in rehabilitating a
historic home. To qualify, the historic home must (1) have no more than four units,
one of which must be the owner’s principal residence for at least five years after
rehabilitation is completed, and (2) be (a) listed on the National or State Register
of Historic Places or (b) located in a district listed in either register and certified by
DECD as contributing to the district’s historic character.
To qualify for the credit, the project’s construction costs must exceed $15,000.
The credit equals 30% of the eligible construction costs but may not exceed $30,000
per dwelling unit (or $50,000 for owners that are nonprofit corporations). DECD
may reserve up to $3 million in vouchers for these credits each fiscal year, 70% of
which must be for rehabilitating homes in the municipalities designated as “regional O L R P U B L I C A C T S U M M A R Y
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centers” in the current state plan of conservation and development.
Related Act
PA 24-151, § 128, enacted identical provisions.