Article: 50225
Overview
Form N-586 is used to calculate and claim the Hawaii Low-Income Housing Tax Credit, which is designed to encourage investment in affordable rental housing across the state. This credit is based on the federal Low-Income Housing Tax Credit (LIHTC) under Internal Revenue Code § 42 and is jointly administered by the Hawaii Housing Finance and Development Corporation (HHFDC) and the Hawaii Department of Taxation.
Eligibility Requirements
The credit applies to buildings that are certified under IRC § 42 as low-income housing projects, typically those that have received an LIHTC allocation from HHFDC.
Credit Amount
The amount of credit depends on when the building was placed in service:
- 50% Credit: For buildings placed in service on or after July 1, 2005, the Hawaii credit is 50% of the federal LIHTC amount.
- 30% Credit: For buildings placed in service before July 1, 2005, the credit is 30% of the federal amount.
Exclusions for Certain Projects:
Properties placed in service after 2011 that elected to receive a state tax credit instead of a credit are not eligible to claim this tax credit.
Add Form N-586
To add the Form N-586:
- Go to State Taxes.
- Click Review.
- Click I’d like to see the forms I’ve filled out or search for a form.
- From the drop list, select Hawaii.
- Go to the Credits tab.
- Locate and click on N586 – Tax Credit for Low-Income Housing to open the screen.
- Enter your information and click Save.
Further Information
See the instructions for Form N-586 for more information.