Historic Building Tax Credits

For Information Contact:

Executive Director
Historic Quincy Business District
510 Maine Suite 300
Quincy, IL 62301
217/228-8696
director@downtownquincy.com

Or visit the Illinois Historic Preservation Agency website at www.state.il.us/hpa/ps/taxcredits.htm.

Overview
The 20% Investment Tax Credit is designed for "historic" buildings (those listed on the National Register of Historic Places, either individually or as contributing to a district). The credit is worth 20% of the amount spent renovating the building. Properties must be depreciable, that is they must be income producing from commercial, industrial, or residential uses. Owner-occupied housing is not eligible. Owners may be individuals or businesses and must pay federal income taxes.

Requirements
Because eligible buildings are historically significant, there are several project requirements for the 20% ITC. The amount spent on the renovation project must be greater that the "adjusted basis" of the building at the start of the project, or a minimum of $5000. Owners have 24 months to complete the project, though owners may qualify for a 60 month phased schedule. All interior and exterior work within the framework of the building itself is eligible. Eligible work includes masonry repair, exterior painting, interior remodeling, and mechanical work. Examples of ineligible work include building additions, appliances, furniture and fixtures. The project also must be reviewed and certified by the National Park Service through the Illinois Historic Preservation Agency (IHPA). Approval of proposed work typically takes from 3 to 6 months.

For certification, the project must meet the Secretary of the Interior's Standards for Rehabilitation. The Standards do not require restoring a building or its features to its original appearance, but instead requires the preservation of as much of the existing historic features and materials as possible. Non-historic features may be retained, and new, compatible alterations or additions may be added. Though the credits may be applied for after work has begun and up to 36 months after the project was completed, it is strongly recommended that application be filed before work begins to avoid costly mistakes or possible certification denial.

Project Assistance
IHPA works closely with applicants to review the project and devise solutions to any potential problems. IHPA will also answer questions about the credit and about proper preservation techniques and guide the owner through the application process.

Application
The 20% ITC application is divided into three parts. Part I certifies that the building is indeed "historic." Buildings which are listed as contributing to a historic district, are currently being nominated to the National Register, or are listed on approved local designations must have Part I certified. The Part II application describes the work to be done to the building. Most of the proposals are described in written format, though architectural drawings and specifications may be included. Photos of the existing conditions of the building are also submitted. It is recommended that Part II be certified before the construction begins. Part III certifies that the work has been completed, has met the Standards, and lists the value of the renovation. The certified Part III is filed with the IRS form for claiming the tax credit in the year the project is completed.