Georgia Low Income Housing Credits
The State Tax Credit Exchange has been offering taxpayers tax credits for seven years. We have access to several funds which warehouse the credits and make them available to purchasers on a single year basis. This approach, which we pioneered with the assistance of several law firms, allows an individual to acquire single year Georgia low income housing credits by investing in one or more of these funds. The only requirement is that the partner/member must be a member of the partnership/LLC for at least one day out of the year to receive the desired allocation of Georgia low income housing credits. Buyers of these credits can anticipate savings between 10% and 40% of their state tax liabilities.
Georgia offers a transferable low income housing tax credit. To acquire the credit, a purchaser must invest in a partnership or LLC taxable as a partnership which either directly or indirectly owns in interest in a low income housing project which is eligible for the credit. The credit is granted over a ten year period.
The Georgia low income housing tax credit can also be acquired in 5 year and 10 years strips of credits.
Unlike the federal statute, Georgia allows its credit to be allocated to any partner of a partnership or member of an LLC in any manner. Thus there is no requirement for the allocation of the Georgia credit to comply with federal allocation rules contained in IRC Section 704.
The Georgia Low Income Housing Credit is a dollar for dollar credit against the 
Georgia individual and corporate income tax. Trusts as well as any of other entity subject to the Georgia income tax are eligible to use the credit. The credit also applies against the bank income tax and the insurance premium tax.
The credit is nonrefundable, but can be carried forward for three years to the extent the credit exceeds the taxpayer’s Georgia income tax liability.
Most individuals prefer acquiring one year streams of credits due to the difficulty in forecasting their incomes and the possibility that they might move and no longer have any Georgia liability at all.