U.S. Senate Finance Committee Releases Draft Reconciliation Bill: Housing Credit Changes, Nonprofit and Tax Issues
(June 24, 2025) The reconciliation text released by the U.S. Senate Finance Committee on June 16th includes changes to the Low-Income Housing Tax Credit (LIHTC) program compared to what is in the House-passed version of the bill. The committee’s text would permanently increase housing credit allocations to states by 12 percent for 9 percent housing credits and permanently lower the bond financing threshold from 50 to 25 percent for projects placed in service starting in 2026. LeadingAge supports permanency for these important housing credit program changes.
The House bill includes a 12.5 percent allocation for four years (calendar years 2026 through 2029) and lowers the bond financing threshold to 25 percent for 4 percent LIHTC properties placed in service after Dec. 31, 2025 and before Jan. 1, 2030. The House bill also includes a 30 percent basis boost for properties in rural or tribal areas, which LeadingAge supports, but the Senate Finance Committee bill does not include any basis boost for these areas.
LeadingAge’s initial analysis shows that the Senate bill, in addition to including provisions the association supports such as enhancing the LIHTC, does not include policies the association has been guarding against since early this year, such as a limitation on or elimination of tax exemption for municipal bonds (the House bill also does not include these provisions).
On review, the Senate language appears more favorable than the House’s One Big Beautiful Bill Act in terms of its impact on nonprofits. Read a longer article on tax and nonprofit issues in the House and Senate bills by LeadingAge here.
It is important to note that this initially released language is subject to changes in the coming days. Keep up with budget reconciliation news from LeadingAge with this serial post.
Contact: Annalyse Komoroske Denio, akomoroskedenio@leadingageny.org, 518-867-8866