Wisconsin Historic Preservation Tax Credits & Federal Historic Preservation Tax Credits
Owners of historic income-producing properties in Wisconsin may be eligible for two income tax credits that can help pay for their building’s rehabilitation. The Wisconsin Historical Society’s Division of Historic Preservation (DHP) administers both programs in conjunction with the National Park Service (NPS). The programs are:
- Federal Historic Preservation Credit: This program returns 20 percent of the cost of rehabilitating qualified historic buildings to owners as a direct reduction in their federal income taxes.
- Wisconsin Supplemental Historic Preservation Credit: This program returns an additional 20 percent of the cost of rehabilitation to owners as a discount on their Wisconsin state income taxes. Owners that qualify for the Federal Historic Preservation Credit automatically qualify for the Wisconsin supplement if they get NPS approval before they begin any work.
New Market Tax Credits
The New Markets Tax Credit (NMTC) Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in eligible Community Development Entities (CDEs). The NMTC program was designed to make investment capital available to businesses in qualifying low-income communities, to create jobs and spur additional economic development. Businesses eligible to receive NMTC financing are corporations, partnerships, sole-proprietorships and non-profits that are active and located in a low-income community, as defined by the NMTC regulations.
In general, a Low-Income Community is defined as a Census tract with a poverty rate of at least 20%, or with median income of up to 80% of the area or statewide median, whichever is greater. For a non-metropolitan census tract, 80% of the statewide median is acceptable.
Additionally, the business receiving the tax credits must derive at least half its gross income from business in the eligible area and must have a “substantial portion” (40%) of its tangible property located in a low-income community. Finally, the business must perform a substantial portion (40%) of its services in any low-income community.
New Market tax Credits are distributed by local financial institutions that have been pre-qualified by the US Treasury Department to administer the program. Check with your bank to see if they are a participating institution.