Missouri Tax Credits

Missouri Tax Credits

Low Income Housing Credits

Missouri low income housing credits are a dollar for dollar credit against the Missouri individual trust and corporate income tax, as well as Missouri insurance premium taxes and bank taxes. These credits are awarded to developers of low income housing projects. To acquire the credit from a developer, a purchaser must invest in a partnership or LLC taxable as a partnership that either directly or indirectly owns an interest in an eligible low income housing project. The credit is granted over a ten-year period.

The Process

Monarch Private Capital warehouses Missouri low income housing credits, offering them for sale to taxpayers in one-year increments. We pioneered the approach to a single-year credit by allowing taxpayers to invest in one or more funds that warehouse these credits. Most individuals prefer acquiring one-year streams of credits due to the difficulty in forecasting incomes or a potential relocation outside of Missouri.

Characteristics of Missouri Low Income Housing Credits:

  • Can be utilized by any entity subject to Missouri income tax
  • Applicable against income taxes, corporation franchise taxes, insurance premium taxes and bank taxes
  • Low default rate over the 20+ year history
  • Recapture risk is only on one-third of the accelerated portion of the credits
  • Credits can be allocated to any partner of a partnership or member of an LLC in any manner
  • No requirement to comply with federal allocation rules

Credit Benefits:

  • Offer savings between 4.5% and 6.5% on state tax liabilities
  • Can be carried forward for five years and carried back for three years (credit not to exceed the taxpayer’s Missouri income tax liability)
  • May offset 100% of taxpayer’s liability
  • Can be acquired in multi-year strips of credits anywhere in duration from 2 to 10 years
  • Transferrable to other entities
  • Fund investment approach greatly mitigates any recapture exposure

Historic Redevelopment Tax Credits

Coming Soon