Illinois Historic Preservation Tax Credit Program

​The Illinois Historic Preservation Tax Credit Program (IL-HTC) provides a state income-tax credit equal to 25% of a project's Qualified Rehabilitation Expenditures (QREs), not to exceed $3 million, to owners of certified historic structures who undertake certified rehabilitations. The substantial investments will create jobs in Illinois, stimulate local economies, and revitalize historic structures and neighborhoods. The Illinois Historic Preservation Tax Credit Program is administered by the Illinois State Historic Preservation Office in the Illinois Department of Natural Resources and runs from January 1, 2019 to December 31, 2023 (35 ILCS 5/228 and 35 ILCS 31/1 et. seq.).

Program Requirements

To receive an IL-HTC, projects must meet all of the following requirements:

  1. By the time the state tax credits are issued (which occurs after the project is completed and approved), the structure must be certified as historic, meaning 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 district that has been certified by the National Park Service (NPS) for the purposes of taking the federal tax credit.
  2. QREs must be incurred between January 1, 2019 and December 31, 2023 and must exceed the greater of $5,000 or the building's adjusted basis on the first day the qualified rehabilitation plan commenced.
  3. The structure must be used for income-producing purposes, such as rental-residential, commercial, agricultural, and/or industrial.
  4. The IL-HTC must be applied for in conjunction with the 20% Federal Historic Rehabilitation Tax Credit (F-HTC). The F-HTC Part 2 must be approved by the NPS prior to applying for an IL-HTC allocation. The F-HTC Part 3 must be certified by the NPS prior to applying for an IL-HTC certificate. Click here to see NPS's webpage on the 20% F-HTC and its application.
  5. The qualified rehabilitation plan must obtain an IL-HTC allocation as per the process detailed below.

IL-HTC Allocation

The IL-HTC program caps the amount of credit available to be allocated at $15 million in the first year and a total of $75 million over five years. There will be two allocation rounds held each year of the 5-year program. Each round has an application consisting of three mandatory parts: S-1, S-2, and S-3.

Part S-1: This first part of the allocation application is a virtual workshop, at which SHPO staff will explain the IL-HTC program and its allocation process. Anyone can attend, and no RSVP is required.
For attendance to count as Part S-1: an applying project must have its F-HTC Part 2 approved or conditionally approved by the NPS by the date of that round's Part S-1 workshop.

Part S-2: The second part of the IL-HTC application is a simple online submittal that establishes the order in which the sorted Part S-3s will receive allocations. Projects that submit a Part S-2 will receive an automatic e-mail response confirming the date and time the submittal was received by the SHPO.
To be eligible to submit Part S-2: an applying project must have been represented at that round's Part S-1 workshop.

Part S-3: The last part of the IL-HTC allocation application is an electronic submittal that provides an estimate of qualified rehabilitation expenditures that will determine the amount of the allocation and asserts the number of priorities that the project meets. All projects must submit a Part S-3, even if they do not meet any of the five priorities. The SHPO will sort complete IL-HTC applications based on the number of priorities each project meets: five, four, three, two, one, or zero. Within each stack of prioritized projects, applications will be placed in the order that their Part S-2s arrived at the SHPO. The final queue will begin with the project that meets the highest number of priorities and whose Part S-2 the SHPO received first. See here for detailed 2020 Round 2 S-3 submittal information.
To be eligible to submit Part S-3: an applying project must have submitted that round's Part S-2.

The five priorities that can be asserted per project are:

  1. The structure must be located in a county that borders a state with a historic income-producing-property rehabilitation credit. Click here to download instructions on how to assert this priority for your project in 2020 Application Round 2.
  2. The structure must have been previously owned by a federal, state, or local-governmental entity for no less than six months. Click here to download instructions on how to assert this priority for your project in 2020 Application Round 2.
  3. The structure must be located in a census tract that has a median family income at or below the Illinois median family income; data from the most recent 5-year estimate from the American Community Survey (ACS), published by the U.S. Census Bureau, shall be used to determine eligibility. Click here to download instructions on how to assert this priority for your project in 2020 Application Round 1 and 2.
  4. The qualified rehabilitation plan must include in the development partnership a Community Development Entity, a low-profit organization, or a not-for-profit organization, as defined by Section 501(c)(3) of the Internal Revenue Code. Click here to download instructions on how to assert this priority for your project in 2020 Application Round 2.
  5. The structure must be located in an area declared under the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act as an Emergency Declaration (pursuant to Title V of the Act) or Major Disaster Declaration (pursuant to Title IV of the Act). The declaration must be no older than 3 years at the time of application. Click here to download instructions on how to assert this priority for your project in 2020 Application Round 2.

 

2020 Application Round 2—Tax Credit Allocation Process, Dates and Deadlines

Available allocation funds: $7.5 million

Part S-1

  1. Wednesday, September 23, 2020, 1:30-4:30 pm: The S-1 workshop will be an online WebEx Event. This workshop is required for all Round 2 applicants.
    • To join the online event (you may do so starting at 1:00 pm; staff will be available to troubleshoot connection issues):
      1. Click here to join the event
      2. Enter your name and e-mail address
      3. Enter the event password (case sensitive): IL-HTC
      4. Click the "Join" button
    • In order to hear presenters, you will need to connect to the audio.
      • BEST PRACTICE for joining the WebEx Event
        1. Click "Call Me" or "Use Computer for Audio"
        2. If using "Call Me" input your call-back number
      • Or dial-in
        1. Audio conference information—US Toll: +1-415-655-0002
        2. Global call-in numbers—Access code: 133 601 9964
    • For those who wish to test their audio/video connections prior to the event, please contact Anna Margaret Barris to set up a trial meeting.
    • During the S-1 meeting:
      • SHPO explains the IL-HTC 3-application, allocation, and certification processes.
      • SHPO provides the web link for Part S-2 (online) of the application.
      • Each project for which an application will be submitted must provide the project's NPS project number and city in the public Chat box during the event.
    • Other relevant info:
      • All projects applying for the IL-HTC must have a federally approved or conditionally approved F-HTC Part 2 by the date of the S-1 workshop.
      • For related multiple-building rehabilitations, the NPS will determine for F-HTC purposes whether they are one or multiple projects and will assign NPS project numbers accordingly. The IL-HTC program will follow the NPS determination.
      • People are encouraged to attend the workshop even if they do not intend to submit the rest of the IL-HTC application for this round.
  2. Wednesday, September 30, 2020: SHPO posts on program website a list of all S-1 attendees and the projects they represent.

Part S-2

  1. Wednesday, September 23, 2020, 10:00 am: Part S-2 website goes live. The 'Submit' button will not be enabled until the exact time the Part S-2 application period starts and will be disabled when the period ends.
  2. Wednesday, October 7, 2020, 10:00 am: Part S-2 online submission activates, allowing applicants to complete it. NPS project number and the date of NPS certification (i.e., date the NPS reviewer signed the F-HTC Part 2) will be two of the required fields. This submission is required for all Round 2 applicants.
  3. When the Part S-2 is electronically submitted, each applicant will receive and auto-confirmation e-mail stating the date and time the SHPO received the Part S-2.
  4. Thursday, October 8, 2020, 5:00 pm: Part S-2 online submission deactivates.
  5. SHPO cross references the Part S-2s received with S-1 workshop attendees.
    • Part S-2 applications not represented at the Part S-1 workshop are removed from consideration for this round.
    • Remaining Part S-2 applications are sorted based on date and time of their receipt.
  6. Friday, October 16, 2020: SHPO notifies all S-2 applicants of the order of S-2 applications received and whether they are eligible to proceed with Part S-3. Eligible S-2 applicants may then submit Part S-3.
  7. SHPO posts on program website a list of all S-2 applications, sorted by date and time received, noting any projects removed from consideration due to being absent from the S-1 meeting.

Part S-3

  1. Wednesday, October 21, 2020, 5:00 pm: Deadline for receiving at the SHPO an optional draft electronic submission of Part S-3.
  2. Monday, November 9, 2020, 5:00 pm: Deadline for SHPO responses to optional draft Part S-3 submittals and questions.
  3. Monday, November 16, 2020, 5:00 pm: Deadline for receiving at the SHPO the final electronic submission of Part S-3 from eligible applicants (those who successfully completed Parts S-1 and S-2). This submission is required for all Round 2 applicants.
  4. SHPO reviews all Part S-3s and determines the number of priorities met per applicant.
  5. SHPO sorts all Part S-3s in the following order:
    • Projects with 5 priorities in the order their S-2s were received.
    • Projects with 4 priorities in the order their S-2s were received.
    • Projects with 3 priorities in the order their S-2s were received.
    • Projects with 2 priorities in the order their S-2s were received.
    • Projects with 1 priority in the order their S-2s were received.
    • Projects with 0 priorities in the order their S-2s were received.
  6. SHPO reviews the estimated QREs for each Part S-3 and determines the project's state tax credit allocation (i.e., the maximum amount of credit the project can apply for upon project completion).
  7. SHPO assigns the allocations, starting with the project that meets the most priorities and whose S-2 was received first, and proceeds in descending order until the available allocation amount has been assigned. 
    • The SHPO assigns an allocation in an amount equal to the lesser of the following:
      • For projects that are not completed, or that are completed and have a certified F-HTC Part 3 but not a cost certification, 25% of the estimated QREs incurred on or after 1/1/19, or
      • For projects that are completed and have a certified F-HTC Part 3 and a cost certification, 25% of final certified QREs incurred on or after 1/1/19 from the cost certification, or
      • $3 million
    • If, at the end of an allocation round, the allocation amount of the last eligible project exceeds the available allocation amount that remains, the SHPO allocates the remaining amount to that project. The project may competitively re-apply in a subsequent round for the balance of the allocation. 
  8. On or before Monday, December 14, 2020: SHPO notifies all Part S-3 applicants of the Round 2 allocation results by email.
  9. SHPO posts on program website the list of Part S-3 applications, sorted first by priority then by date and time received, and the amount (if any) of each application's allocation. The amount of allocations known to be available for the next allocation round is also noted.

2021 Application Round 1—Dates and Deadlines

Available allocation funds: $7.5 million plus any unassigned allocations from 2020 Round 2

  • Wednesday, February 24, 2021, 1:30 pm: Part S-1 mandatory online workshop.
  • Wednesday, February 24, 2021, 10:00 am: Part S-2 website goes live.
  • Wednesday, March 3, 2021: SHPO posts Part S-1 workshop attendees and projects represented.
  • Wednesday, March 10, 2021, 10:00 am: Part S-2 online submission activates.
  • Thursday, March 11, 2021, 5:00 pm: Part S-2 online submission deactivates.
  • Friday, March 19, 2021: SHPO emails all S-2 applicants whether they are eligible to proceed with Part S-3.
  • Friday, April 23, 2021, Midnight CST: Deadline for receiving Part S-3 at the SHPO.
  • Friday, May 21, 2021: SHPO notifies S-3 applicants of the Round 1 allocation results by email.
2021 Application Round 2—Dates and Deadlines

Available allocation funds: $7.5 million plus any unassigned allocations from 2021 Round 1

  • Wednesday, September 22, 2021, 1:30 pm: Part S-1 mandatory online workshop.
  • Wednesday, September 22, 2021, 10:00 am: Part S-2 website goes live.
  • Wednesday, September 29, 2021: SHPO posts Part S-1 workshop attendees and projects represented.
  • Wednesday, October 6, 2021, 10:00 am: Part S-2 online submission activates.
  • Thursday, October 7, 2021, 5:00 pm: Part S-2 online submission deactivates.
  • Friday, October 15, 2021: SHPO emails all S-2 applicants whether they are eligible to proceed with Part S-3.
  • Monday, November 22, 2021, Midnight CST: Deadline for receiving Part S-3 at the SHPO.
  • Wednesday, December 15, 2021: SHPO notifies S-3 applicants of the Round 2 allocation results by email.

IL-HTC Certification of QREs

In addition to the required 3-part F-HTC application and approval process, applicants who have received and IL-HTC allocation (see allocation process information above) and who are seeking an IL-HTC certificate must submit an IL-HTC Certification of QREs. Scan of a signed document should be e-mailed to the SHPO reviewer of the F-HTC application.

After the project's F-HTC Part 3 has been certified by the NPS, the applicant mails the SHPO one completed IL-HTC Certification of QREs 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 IL-HTC Certification of QREs, the owner and his or her independent CPA certify:

  1. The project's total QREs; and
  2. The project's QREs that were incurred between January 1, 2019 and December 31, 2023; and
  3. The adjusted basis of the building on the first day the qualified rehabilitation plan commenced; and
  4. The opinion or conclusion that the QREs incurred between January 1, 2019 and December 31, 2023, exceed the greater of $5,000 or the adjusted basis of the building on the first day the qualified rehabilitation plan commenced; and
  5. The project's total non-QREs, regardless of when they were incurred; and
  6. The project's total expenditures (qualified and non-qualified).

Upon review and acceptance of the applicant's Certification of QREs and prior to the issuance of the IL-HTC certificate, an issuance fee of 2% of the value of the IL-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.