Sponsors (3)
The bill clarifies tax-law language to improve compliance and simplify IRS administration, but may create short-term uncertainty and transitional costs for taxpayers and preparers as new rules are implemented.
Taxpayers and financial institutions get clearer statutory tax language that reduces filing ambiguity and helps the IRS simplify administration and enforcement of the affected credit/deduction rules.
Taxpayers may incur transitional compliance costs if the change alters eligibility or calculation of credits/deductions for tax years after enactment.
Tax preparers and taxpayers may face short-term uncertainty while the IRS issues regulations or guidance to interpret the newly inserted language.
Based on analysis of 2 sections of legislative text.
Amends the tax code to change carryback treatment for the Affordable (low‑income housing) tax credit, affecting how unused credits can be applied across tax years.
Official title: To amend the Internal Revenue Code of 1986 to allow 5-year carrybacks for the low-income housing tax credit.
Introduced May 22, 2026 by Mike Carey · Last progress May 22, 2026
Amends the Internal Revenue Code to change how the Affordable Housing (low‑income housing) tax credit is treated for carryback purposes, by altering the text of section 39(a)(3). The change takes effect for taxable years beginning after the date of enactment and is intended to affect how unused affordable housing credits are applied across tax years. The amendment is a targeted tax-code change that mainly affects owners, developers, investors, and lenders engaged with low‑income housing projects by changing credit carryback rules and therefore the timing of tax benefits and potential cash flow for affordable housing financing.