Credit for Rehabilitation of Historic Properties: Credit for Rehabilitation of Historic Properties (2024)

Who files this form

Use this worksheet to claim the Maine credit for qualified rehabilitation expenditures for a certified historic structure located in Maine. The worksheet covers:

• Projects with a federal credit: Rehabilitation expenditures for which a credit under Internal Revenue Code Section 47 is claimed.
• Small projects without a federal credit: Qualified expenditures of at least $50,000 and no more than $250,000 incurred on or after January 1, 2008, subject to the certification requirements.

Owners of pass-through entities, including partnerships, LLCs, S corporations, and trusts, may receive a credit based on their ownership interests or an executed agreement among the owners.

Complete a separate worksheet for each portion of a certified rehabilitation and each building that is part of a certified historic structure.

When it's due

For the tax year 2024 worksheet, the required determination that the proposed rehabilitation meets the Secretary of the Interior’s standards must be issued on or before December 31, 2030:

• By the National Park Service when a federal credit is claimed.
• By the Maine Historic Preservation Commission for a qualifying small project without a federal credit.

This is a certification determination cutoff, not a tax return filing deadline. The text does not provide a return filing due date.

What you'll need

Gather the information and attachments that apply to your claim:

• Taxpayer name, EIN or SSN, tax year beginning and ending dates, and the date the property was placed in service.
• Certified qualified rehabilitation expenditure amounts. For box A, use federal Form 3468, Part VII, lines 1i and 1j.
• Box A: A copy of Part 3 of the historic preservation certification application approved and signed by the National Park Service, plus federal Form 3468.
• Box B: A copy of Part 3 of the small project rehabilitation certification application approved and signed by the Maine Historic Preservation Commission. If you do not have an approved application, the instructions require an explanation of why the rehabilitation has not been approved.
• Reporting forms: Copies of both Parts A and B signed by the Maine Historic Preservation Commission. The worksheet warns that you do not qualify unless the appropriate copies are enclosed.
• Box C: A copy of the affordable housing certificate from the Maine State Housing Authority.
• Pass-through entity claims: The entity’s name and EIN or SSN, your ownership percentage, and your credit percentage if different under an executed agreement.
• Recapture: A copy of federal Form 4255 when completing Part B.

How to file

1. Enter your identifying information and tax year dates, and check boxes A, B, and C as applicable.
2. Complete Part A. Apply a 35% credit rate if box C is checked; otherwise, apply 25%. Limit the credit on each worksheet to $5,000,000, then calculate the current-year refundable installment at 25% of that amount. Follow the ownership-percentage instructions for pass-through entity claims.
3. Transfer the amount from Part A, line 7, to the applicable return:

• Form 1040ME, Schedule A, line 6.
• Form 1040C-ME, Schedule A, line 1.
• Form 1041ME, Schedule A, line 2.
• Form 1120ME, Schedule C, line 2a.
• Form 1120B-ME, line 4d.
• Form INS-4, line 19.

1. If you have multiple worksheets, add their line 7 amounts to determine your total available credit.
2. Enclose the worksheet and required attachments with the applicable Maine return. Complete Part B if the credit is subject to recapture.

Save copies of the 2024 worksheet to submit with your 2025, 2026, and 2027 returns. Do not complete a new worksheet for the same rehabilitation in subsequent years.

The text does not provide a mailing address or e-file instructions.

Common mistakes

• Leaving out required attachments. The worksheet says you do not qualify unless the appropriate certification and reporting copies are enclosed.
• Combining buildings or rehabilitation portions on one worksheet. Complete a separate worksheet for each required portion and building.
• Missing a required amendment. If box A is checked and the federal credit is later amended, the Maine credit must also be amended. If box B is checked and final certification is denied, the Maine credit is disallowed for every year claimed, and an amended Maine return must be filed if necessary.
• Preparing a new worksheet for later installments. Keep the original 2024 worksheet and submit copies with the 2025, 2026, and 2027 returns.
• Overlooking the affordable housing condition. A certified project that does not remain affordable housing for 30 years from its placed-in-service date is subject to repayment provisions.

Questions people ask

How much is the credit?

The credit is generally 25% of certified qualified rehabilitation expenditures. It increases to 35% if the rehabilitation is certified as an affordable housing project by the Maine State Housing Authority. Each worksheet is limited to a $5,000,000 credit. Any amount above that limit cannot be carried back or forward.

Is the credit refundable?

Yes. The credit is fully refundable over four years, with 25% available each year. The 2024 worksheet lists installments for 2024, 2025, 2026, and 2027.

Can I claim the Maine credit without claiming a federal credit?

Yes, under the small project rules. Certified qualified expenditures must total at least $50,000 and no more than $250,000 for the period beginning on or after January 1, 2008, for the certified historic structure. This limit applies across all tax years. The small project rules do not require the structure to be substantially rehabilitated.

Which year do I claim the credit?

If you claim a federal Section 47 credit, claim the Maine credit in the same tax year. For a qualifying small project without a federal credit, claim it in the year the rehabilitated structure is placed in service.

Can the credit be recaptured?

Yes. The Maine credit is subject to the same recapture provisions as a credit under Internal Revenue Code Section 47. Calculate Maine recapture in Part B and enclose federal Form 4255. Separate repayment provisions also apply to certified affordable housing projects.

Official sources

• https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/24_rehab_hist_prop_ff.pdf