IRS Grants Additional Relief for Rehabilitation Credit Deadlines

WASHINGTON, D.C. — Because of the burdens the COVID-19 pandemic has placed on taxpayers claiming the rehabilitation credit, the Internal Revenue Service issued Notice 2020-58 that provides additional relief to taxpayers in satisfying the substantial rehabilitation test.

Projects must satisfy the “substantial rehabilitation test” within a 24- or 60-month period for determining whether the rehabilitation work is sufficient to qualify a building for the rehabilitation credit.

The Tax Cuts and Jobs Act (TJCA) generally requires the rehabilitation credit to be claimed over a five-year period for amounts that taxpayers pay or incur for qualified rehabilitation expenditures after December 31, 2017. However, taxpayers may claim the credit all in one year under pre-TCJA rules for projects that qualify under a transition rule.

The notice allows taxpayers that have a measuring period under the substantial rehabilitation test ending on or after April 1, 2020, and before March 31, 2021, now have until March 31, 2021 to satisfy the test. This relief applies to the substantial rehabilitation test for claiming the credit or qualifying under the TCJA transition rule.

READ:  Nearly 1 Million Additional Economic Impact Payments Disbursed This Week

Previously, the IRS issued Notice 2020-23 that provided additional time for satisfying the substantial rehabilitation test.

Additional tax relief related to the COVID-19 pandemic can be found on

Thanks for visiting! MyChesCo brings reliable information and resources to Chester County, Pennsylvania. Please consider supporting us in our efforts. Your generous donation will help us continue this work and keep it free of charge. Show your support today by clicking here and becoming a patron.

Disclosure: This site contains affiliate links to products, identified by the Affiliate Disclosure icon. MyChesCo may receive a commission for purchases made through these links.

Buy Us a Cup of Coffee