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River Edge Historic Tax Credit Program

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Program Description

The River Edge Historic Tax Credit Program (RE-HTC) provides a state income-tax credit equal to 25% of a project's qualified rehabilitation expenditures to owners of certified historic structures located within River Edge Redevelopment Zones (Aurora, East St. Louis, Elgin, Peoria, and Rockford) who undertake certified rehabilitations. The projects that have already taken advantage of this incentive represent substantial rehabilitation investments and have created jobs in Illinois, stimulated the economies of River Edge communities, and revitalized historic structures and neighborhoods. Similar to the federal historic tax credits, an issued state tax credit may not be sold or otherwise transferred to another person or entity, but the tax credits can be syndicated.

The River Edge Historic Tax Credit Program runs from January 1, 2012 to December 31, 2026. Originally set to expire on December 31, 2016, the RE-HTC was extended several times, most recently with Illinois Public Act 102-0016. Effective January 1, 2019, the administration of the RE-HTC Program was transferred to the Illinois State Historic Preservation Office (IL SHPO) within the Department of Natural Resources (DNR), in accordance with revised provisions contained in Illinois Public Act 100-0629, signed by Governor Rauner on July 26, 2018.

The IL SHPO shall determine the amount of eligible state tax credit and will determine, in consultation with the National Park Service (NPS), whether the rehabilitation is consistent with the Secretary of the Interior's Standards for Rehabilitation (Standards). All work on the project (interior and exterior) must meet the Standards. Upon review of the completed project and its certification by the NPS, IL SHPO shall issue a RE-HTC certificate to the owner in the amount of the eligible state tax credits.

Program Requirements

Projects must meet the following requirements:

  1. The structure must be located within a River Edge Redevelopment Zone (designated portions of Aurora, East St. Louis, Elgin, Peoria, and Rockford). To determine whether your property is within one of these five River Edge Redevelopment Zones, contact the city's Zone administrator, whose contact information is listed here.

  2. By the time the state tax credits are issued, the structure must be certified as historic, which means that it must meet one of these three criteria:

    • listed individually on the National Register of Historic Places, or

    • a contributing building within a National Register historic district, or

    • a contributing building within a local historic district that has been certified by the National Park Service for the purposes of taking the federal tax credit.

  1. To determine whether a property is a certified historic structure, contact the IL SHPO's Survey and National Register Coordinator. For other questions regarding the credit please contact the Tax Incentives Manager.

  1. Qualified rehabilitation expenditures incurred between January 1, 2012 and December 31, 2017 must equal or exceed $5,000 and must exceed 50% of the purchase price of the property when it last sold. All qualified rehabilitation expenditures in aggregate must exceed $5,000 or the building's adjusted basis, whichever is greater. This mirrors the requirement of the 20% Federal Historic Rehabilitation Tax Credit, for which the owner is also required to apply.

  2. The structure must be used for income-producing purposes, such as rental-residential, commercial, agricultural, and/or industrial.

Application Process and Forms

The RE-HTC must be applied for in conjunction with the 20% Federal Historic Rehabilitation Tax Credit (F-HTC); therefore, the RE-HTC forms have been designed to complement and not duplicate the F-HTC forms. Click here to see the NPS's webpage on the 20% federal credit and application. It is highly recommended that prior to construction, applicants discuss their projects with IL SHPO at 217-524-0276 or 217-558-8918, and submit the Part 1 and Part 2 of the F-HTC application in accordance with current submittal instructions.

In addition to the required application and approval process of the F-HTC, applicants who would like to apply for the RE-HTC must also submit digital scans of the following, signed forms to the IL SHPO project reviewer assigned to their F-HTC project:

 

RE-HTC 1
"Certification of River Edge Location"

At the beginning of the project, the applicant e-mails a scan of one completed and signed RE-HTC 1 form and map to IL SHPO. This form certifies that the property is located within the boundaries of a designated River Edge Redevelopment Zone. The form requires the signature of the building owner and the respective River Edge Zone administrator and must be accompanied by a current and legible map of the River Edge Zone with the building location marked.

The RE-HTC 1 must be approved prior to the completion of the project.

RE-HTC 2
"Certification of Qualified Rehabilitation Expenditures"

After the project's F-HTC Part 3 has been certified by the NPS (or after each completed project phase has been approved by the NPS), the applicant e-mails the IL SHPO one completed RE-HTC Certification of QREs (RE-HTC 2 form, rev. 1/2021) signed by the qualified taxpayer and its independent CPA. The Certification of QREs states and certifies the project's Qualified Rehabilitation Expenditures. By signing the RE-HTC Certification of QREs, the owner and his or her independent CPA certify:

  1. The project's total QREs; and

  2. The adjusted basis of the building on the first day the qualified rehabilitation plan commenced; and

  3. The opinion or conclusion that the total QREs exceed the greater of $5,000 or the adjusted basis of the building on the first day the qualified rehabilitation plan commenced; and

  4. The project's total non-QREs; and

  5. The project's total expenditures (qualified plus non-qualified).

For projects that incurred QREs prior to January 1, 2018, the RE-HTC Certification of QREs must also certify:

  1. The project's total QREs incurred prior to January 1, 2018; and

  2. The purchase price of the property when it last sold.

Upon review and acceptance of the applicant's Certification of QREs and prior to the issuance of the RE-HTC certificate, an issuance fee of 2% of the value of the RE-HTC credits will be collected from the applicant. The IL SHPO will provide applicants the information on the fee payment process and the amount owed.

Application submittal/workflow:

  1. Applicant dowloads all application forms from the IL SHPO and NPS websites.

  2. Applicant completes and mails two copies of the F-HTC Part 1 and e-mails one copy of the RE-HTC 1 and their supporting materials to IL SHPO.

  3. IL SHPO e-mails a date-stamped copy of the RE-HTC 1 back to the applicant.

  4. IL SHPO processes F-HTC Part 1 and sends one packet to NPS and retains one. NPS sends a letter to applicant certifying the property as historic.

  5. Applicant completes and mails two copies of F-HTC Part 2 and supporting materials to IL SHPO. This form may be submitted simultaneously with the F-HTC Part 1.

  6. IL SHPO reviews F-HTC Part 2 for compliance with the Secretary of the Interior's Standards for Rehabilitation. IL SHPO may request additional documentation, suggest modifications to the project, or schedule a site inspection.

  7. IL SHPO forwards one F-HTC Part 2 packet to the NPS for review and retains one. The NPS invoices or charges the owner a fee to review F-HTC Part 2.

  8. NPS reviews F-HTC Part 2 and sends a preliminary determination to the applicant that the proposed work meets (or does not meet) the Standards.

  9. If work changes from the approved F-HTC Part 2, the applicant submits two copies of a federal amendment sheet with supporting materials to IL SHPO. IL SHPO reviews, forwards one amendment packet to NPS for review and retains one.

  10. If the project is phased for the purposes of the F-HTC, it is eligible to receive phased RE-HTCs. Upon completion of each phase the applicant submits two copies of a federal phased advisory determination sheet with supporting materials to IL SHPO. IL SHPO reviews, then forwards one advisory determination packet to NPS for review and retains one.

  11. When construction is complete, applicant mails two copies of F-HTC Part 3 and its supporting materials to IL SHPO.

  12. IL SHPO reviews F-HTC Part 3 to determine its concordance with the approved F-HTC Part 2. IL SHPO may request additional documentation or a site visit.

  13. When documentation is complete, IL SHPO forwards one F-HTC Part 3 packet to NPS for review and retains one. NPS invoices or charges the applicant the remainder of the appropriate fee for its review of F-HTC Part 3.

  14. When NPS receives the fee, it reviews F-HTC Part 3, approves it as meeting the Standards (or denies it), and returns it to the applicant.

  15. When the applicant receives the approved F-HTC Part 3 from NPS, the applicant e-mails one copy of the RE-HTC 2 to IL SHPO.

  16. IL SHPO reviews the RE-HTC 2. If approved, IL SHPO notifies the applicant via a letter and requests from the applicant an issuance fee of 2% of the tax credit amount.

  17. Applicant submits the fee to IL SHPO.

  18. IL SHPO issues the tax credit certificate and e-mails it to the eligible owner along with a copy to the Illinois Department of Revenue (DOR). DOR may require the certificate recipient to verify that it is an individual or entity in good standing and without delinquent tax liabilities with the State of Illinois.

Important Program and Agency Links:

Contact Us

For questions about the River Edge Historic Tax Credit Program, the Secretary of the Interior's Standards for Rehabilitation, or the Federal Historic Rehabilitation Tax Credit process, please contact IL SHPO at 217-524-0276 or 217-558-8918 or via e-mail.