10% Federal Tax Credit

Requirements
  • Your building must have been built prior to 1936, but it cannot be listed on the National Register, have been determined eligible for the 20% credit, or moved from its original location.
  • The building must be placed into income-producing service. This credit does not apply to residential uses such as a rental property.
  • The Internal Revenue Service requires that rehabilitation projects be “substantial,” meaning that the cost of rehabilitation must exceed the adjusted basis of the building. Please refer to the IRS Connection for more information.
  • There is no formal review process for the 10% credit.
  • Following the project’s completion, the tax credit must be claimed on IRS Form 3468 for the year in which the building is placed in service.
  • Projects undertaken for the 10% credit must meet a specific physical test for retention of external walls and internal structural framework:
    • At least 50% of the building’s walls existing at the time of the rehabilitation began must remain in place as external walls at the work’s conclusion.
    • At least 75% of the building’s existing external walls must remain in place as either external or internal walls.
    • At least 75% of the building’s internal structural framework must remain in place.
Department of State Parks & Cultural Resources