Taxpayers may be eligible to claim a federal rehabilitation tax credit equal to 20% of qualified rehabilitation expenditures related to a certified historic structure.  To claim this credit, the project must first be certified by the National Park Service.  Taxpayers are encouraged to apply with the NPS using the Historic Preservation Certification Application before they begin construction work.  The NPS will use the “Secretary of the Interior’s Standards for Rehabilitation” to determine whether the project will be eligible for the credit. 

Taxpayers may be eligible to claim a federal rehabilitation tax credit equal to 20% of qualified rehabilitation expenditures related to a certified historic structure.  To claim this credit, the project must first be certified by the National Park Service.  Taxpayers are encouraged to apply with the NPS using the Historic Preservation Certification Application before they begin construction work.  The NPS will use the “Secretary of the Interior’s Standards for Rehabilitation” to determine whether the project will be eligible for the credit. 

A building listed on the National Register of Historic Places qualifies as a “certified historic structure”.  Rehabilitation must be “substantial”, meaning the expenses must be greater than either $5,000 or the adjusted basis of the building and its structural components.  The credit is allowed in the tax year in which the property is placed in service. 

“Qualified rehabilitation expenditures” are costs related to the original structure which add to the basis of the property.  This does not include additions to the building or any new construction.  Said property can be nonresidential real property, residential rental property, or other real property with a class life greater than 12.5 years, but may not be personal use property. 

After the tax year in which the credit is claimed, the taxpayer must hold the property for five full years.  If he or she should sell the property before the five years has expired, the taxpayer will be required to re-pay a portion of the credit. 

Some rehabilitation projects will also be eligible for a Kansas state tax credit equal to 25% of the qualified expenses as long as it meets the requirements for the federal tax credit.