IRS grants additional relief for rehabilitation credit deadlines


Notice: Historical Content

This is an archival or historical document and may not reflect current law, policies or procedures.

IR-2020-173, July 30, 2020

WASHINGTON — Because of the burdens the COVID-19 pandemic has placed on taxpayers claiming the rehabilitation credit, the Internal Revenue Service today issued Notice 2020-58PDF 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 issued today 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.

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

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