Because of the Coronavirus Disease 2019 (COVID-19) pandemic, the Department of the Treasury and the Internal Revenue Service issued Notice 2021-12, 2021-6 I.R.B. 828, as clarified by Notice 2021-17, 2021-14 I.R.B. 984, to provide temporary relief from certain requirements under § 42 of the Internal Revenue Code (Code) for qualified low-income housing projects and under §§ 142(d) and 147(d) of the Code for qualified residential rental projects.

The relief announced by the IRS includes extended compliance deadlines, as well as a number of temporary waivers and alterations to compliance inspection requirements.

The relief included in IRS Notice 2022-05 applies to:

  • 10% Test for Carryover Allocations
  • 24-Month Minimum Rehabilitation Expenditure Period
  • Place in Service Deadline
  • 2-Year Rehabilitation Period for Bonds
  • Restoration or Replacement Period for Casualty Loss
  • Common Areas and Amenities
  • 12-Month Transition Period to Meet Set-Asides for Qualified Residential Rental Projects
  • Occupancy Obligations

In addition, the notice addresses a number of compliance monitoring issues disrupted by the ongoing pandemic, including correction periods, review of tenant files and physical inspections. Finally, the IRS notice continues to allow property owners to provide temporary emergency housing to medical personnel and other essential workers as if they were displaced individuals.