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2017 Alabama Historic Rehabilitation Tax Credit

  • 2017 Alabama Historic Rehabilitation Tax Credit

Section 40-9F-30 through Section 40-9F-38, Code of Alabama 1975

The 2017 Alabama Historic Rehabilitation Tax Credit provides for a refundable income tax credit against the tax liability of the taxpayer for the rehabilitation, preservation, and development of historic structures. The program provides $20 million in tax credits each calendar year from 2018-2027. The credit is equal to 25 percent of the qualified rehabilitation expenditures for certified historic structures.

The Alabama Historic Commission is the administering agency for this program. Please contact the Alabama Historic Commission for more details.

Once the completed project has been approved by the Alabama Historical Commission and a certificate has been issued, the tax credit must be pre-certified with ALDOR by submitting a credit claim via My Alabama Taxes. Please see the bottom of this page for further details on My Alabama Taxes.

Provisions of the credit include:

  • The credit is refundable and cannot be carried forward. The taxpayer must claim the entire credit in the taxable year in which the reservation is allocated to a project, or the certified rehabilitation is placed in service. Any additional credit allocated to the taxpayer for any given project must be claimed in the taxable year the reservation is allocated; however, in no event shall the tax credit be claimed prior to the taxable year in which the certified rehabilitation project is placed in service.
  • The credit is transferable. Please see below for more information about transferability.
  • Any tax credits granted or transferred to a pass-through entity must be claimed at the entity level.
  • In order to claim the credit, any nonprofit entity awarded the tax credit must file an Alabama income tax return for the tax year the project is placed in service.
  • Tax credits granted or transferred to a single member liability company or a Q-sub that is disregarded for federal income tax purposes shall be claimed by the owner of the disregarded entity.

Transferability of the 2017 Alabama Historic Rehabilitation Tax Credit:

  • The owner of a qualified project may transfer all or part of their credit. Once a credit is transferred, only the transferee may utilize the credit, and the credit cannot be transferred again.
  • If the tax owed by the transferee is less than the tax credit, the transferee is entitled to claim a refund for the difference.
  • All credit transfers must be approved by ALDOR.
  • To transfer the credit, the project owner must submit the following to ALDOR:
    • Transfer statement (Form HRC-TS2);
    • Copy of the tax credit certificate issued by the Alabama Historic Commission;
    • Executed transfer agreement; and
    • $1,000 fee per transferee.
  • The project owner must submit the transfer documents during the pre-certification process through My Alabama Taxes.

Note! Please make sure that the transfer agreement includes the following required information.

  1. Description and address of the Project that has been issued a Historic Rehabilitation Tax Credit Certificate;
  2. The project number assigned to the Project by the Commission;
  3. The date the Project was placed in service and if applicable, the tax year the reservation was allocated to the project. If any supplemental credit is included in the transfer, include the taxable year the additional credit was allocated to the project;
  4. The amount of the credit being transferred to the Transferee;
  5. The purchase amount of the credit;
  6. Statement that the transfer of the credit has been made and the transaction is closed;
  7. The Transferee acknowledges that the recapture of a credit other than a credit that is improperly obtained by the Owner, shall apply against the Transferee who utilizes the tax credit pursuant to Rule 810-3-137.03(2), and
  8. The Transferor is required to notify the Transferee of any recapture or related adjustments of the credit within 30 days after the Transferor is notified that the credit has been recaptured or adjusted.

To utilize the credit on the income tax return, a credit claim request must be made via My Alabama Taxes.

Additional Resources