Qualifying For A Low Income Housing Tax Credit

A low income housing tax credit may be available to low income earners that qualify. Meeting the qualification for the credit requires an individual to understand the requirements for the credit. An individual taxpayer that is a low income earner must file a tax return, regardless of whether the individual owes taxes or not.

What a Low Income Tax Credit Is

A low income tax credit is a reduction in taxes that is applied to an individual tax return. This is done when an individual files a full tax return where they itemize their deductions. For low income earners however this is not possible since low income earners do not itemize their taxes. The credit would be available as an upfront payment that is available based on the individual’s income and tax status.

Rules for Qualifying

The rules for qualifying for a low income housing credit can be found on the IRS.gov website. Many communities also make available information through their department of housing and through community-based organizations. This helps a low income earner to understand the requirements and how to apply for the housing credit.

What is a Low Income Earner?

Most low income earners are considered to be at or below the federal poverty level. This is typically $44,000 for a family of 4 or $11,000 for an individual. Qualifying as a low-income earner is essential in order to receive the low income housing credit. In addition, a low income earner must file a tax return, even if the taxpayer does not owe or have to file a return. The return provides information necessary for the IRS and requisite program to qualify the individual as a recipient of a low income housing tax credit.

The Process for Qualifying

A person who believes that they qualify low income housing tax credit should inquiry through a local housing assistance program about the requirements. This is the first step in gaining information about the program and the level of assistance that is available. Once this is accomplished, a housing program can assist the low income taxpayer in preparing an application or necessary forms to receive the credit. This assistance is generally available in every community and is advertised freely to low income earners.