Updated IRS Unused LIHTC Carryovers for 2023

On April 8, 2024, the Internal Revenue Service (IRS) released a note reserving more than $8 million in unused Low-Income Housing Tax Credit (LIHTC) to individual state affordable housing agencies (HFA).  

This carryover allocation includes unused tax credits from fiscal year 2022. It adds to the pool of federal unused LIHTC the IRS reallocated in October 2023.    

According to a bulletin dated October 10, 2023, the IRS released approximately $3.2 million in unused LIHTC to states, which this current reallocation adds to. 

What Does it Mean? 

These credits are carryovers from the previous calendar year. Carryover credits mean that the states could not allocate them to developers or that not enough credits were left over to develop a low-income property.  

The IRS will allocate these amounts to HFA for the calendar year 2024. Here is the updated unused LIHTC carryover allocation by state. 

S. No.	Qualified State	Additional Amount Allocated	Initial Amount Allocated (October 2023)
1	Connecticut	136,793	54,370
2	Delaware	38,417	15,269
3	Florida	839,149	333,529
4	Georgia	411,670	163,623
5	Illinois	474,636	188,649
6	Maryland	232,551	92,430
7	Massachusetts	263,383	104,684
8	Michigan	378,520	150,447
9	Minnesota	215,671	85,721
10	Montana	42,358	16,836
11	Nebraska	74,237	29,506
12	Nevada	119,876	47,646
13	New Jersey	349,382	138,866
14	New Mexico	79,722	31,686
15	New York	742,288	295,030
16	North Carolina	403,601	160,415
17	Ohio	443,478	176,265
18	Oregon	159,952	63,575
19	Pennsylvania	489,347	194,496
20	Rhode Island	41,259	16,399
21	South Dakota	34,322	13,641
22	Texas	1,132,815	450,249
23	Utah	127,535	50,690
24	Vermont	24,409	9,702
25	Virginia	327,575	130,198
26	Washington	293,706	116,736
27	West Virginia	66,965	26,616
28	Wisconsin	222,286	88,350
Total		8,165,903	3,245,624

State of LIHTC  

Looking at the share of the largest reallocation amounts for the top 10 states reveals some clear insights. 

• The states receiving the most reallocation are generally the states that got the largest allocation of LIHTC from the federal pool for 2022 (the year of the carryover). 
• This makes sense since these states have the largest populations, and LIHTC is allocated by a per capita multiplier. 
• The percentage of unused LIHTC is at most under 1.5%. 

The low rate of unused funds shows that LIHTC is a popular program that will continue to create and maintain affordable housing into 2023.   

This is particularly significant given the shortage of affordable housing and the increasing rent burden on low-income households.