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HPIP Tax Credit Transfers

During the 2021 Legislative Session, Senate Bill 65 was passed and signed by Governor Kelly. This legislation will permit an HPIP certified company to transfer HPIP tax credits, under certain conditions, to another entity or individual.

General HPIP Tax Credit Transfer Requirements

  • The company must be HPIP certified for the tax year generating HPIP tax credits.
  • For projects placed into service on and after January 1, 2021, a taxpayer may sell or transfer up to 50% of the tax credit allowed.
  • The taxpayer may sell or make a transfer to one or more transferees, but the total of all transfers shall not exceed 50% of the taxpayer’s HPIP tax credit.
  • An HPIP certified company may request up to two transfers of those HPIP tax credits generated during the tax credit year. 
  • The credit may be transferred to any individual or entity and shall be claimed in the year the credit was transferred against the transferee’s tax liability.
  • The portion of HPIP tax credits generated in the tax year that are eligible for transfer (50%) may not be carried forward to subsequent tax years for a future transfer. For example, if a calendar year taxpayer with $2,000,000 in HPIP tax credits generated, could transfer up to 50% or $1,000,000 of  tax credits.  If they only transfer $700,000 to a third party, the remaining $300,000 may not be transferred in any subsequent tax year. 
  • The amount of the credit that exceeds the transferee’s income, privilege, or premium tax liability for such year may be carried forward for credit in the succeeding taxable year or years until the total amount of the tax credit is used, except that no such credit shall be carried forward for deduction after the 16th taxable year succeeding the taxable year in which such credit was initially claimed.
  • The administrative fees are $1,500 for the first recipient and $500 for each additional recipient. The fees apply to each individual request submitted and for each transfer per year. 
  • In the event the tax credit earned by the taxpayer and transferred to a transferee is later disallowed in whole or in part by the Secretary of Revenue, the taxpayer that originally earned the tax credit shall be liable for repayment to the state in the amount disallowed.

NOTE: Please allow up to 30 days for a transfer to be reviewed and approved. 

CONTACT

Richard Martinez, HPIP Program Manager

(785) 207-1660

[email protected]

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