The tax credit eligibility must generally be re-certified annually. Specifically, owners are required to annually certify the household’s eligibility for the housing tax credit to ensure compliance with Treasury Regulation 1.42-5(c)(1). This annual recertification confirms that tenants continue to meet income and other eligibility requirements.
There may be some exceptions or allowances for waivers depending on the type of property financing and regulatory changes. For example, properties that received tax-exempt bonds might qualify for a recertification waiver, but even then, some form of certification is required periodically. Additionally, during property resyndication, a full income and asset certification must be completed for all existing households, either at their next normal recertification date or at a new date selected by the owner, which resets the recertification cycle.
In summary, the standard and most common practice is annual re-certification of tax credit eligibility, although certain waivers or conditions might modify the timing or method of this requirement in specific cases.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-often-should-the-tax-credit-eligibility-be-re-certified/
