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TEB Legislation Update: Tax Increase Prevention Act of 2014

The Tax Increase Prevention Act of 2014, Div. A of Pub. L. No. 113-295, which was signed into law on December 19, 2014, amends several laws affecting certain tax-advantaged bonds.

  • Section 113 of the Act amends section 3005(b) of the Housing Assistance Act of 2008 by extending the period in which the military housing allowance is exempt in the determination of “median gross income” (as defined in Internal Revenue Code (IRC) section 142(d)(2)(B)(i)) in respect to the qualified building requirement in IRC section 142(d)(2)(B)(ii), through December 31, 2014. Median gross income is used in determining the continuing tax-exempt status of interest on private activity bonds issued pursuant to IRC section 142(d).

  • Section 120 of the Act amends section 54E(c) of the IRC to provide for $400,000,000 national zone academy bond limitation for qualified zone academy bonds (QZABs) in calendar year 2014. Notice 2015-11 contains the published QZAB allocations.

  • Section 202(d) of the Act amends section 6431(f)(3)(A)(iii) of the IRC to clarify that QZABs issued pursuant to national zone academy bond limitations after 2010 (and any carryforwards of such limitations) are not “direct pay” specified tax credit bonds.

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Page Last Reviewed or Updated: 04-Mar-2016