Form 8609 Instructions Updated for Tax-Exempt Bond Projects

The One Big Beautiful Bill Act made changes for projects financed with tax-exempt bonds after 2025. Please note the following updates for page 2 of the instructions.

• The first paragraph of Tax-exempt bonds should read as follows.

Tax-exempt bonds. No housing credit allocation is required for any portion of the eligible basis of a qualified low-income building that is financed with tax-exempt bonds taken into account for purposes of the volume cap under section 146 if principal payments on the financing are applied within a reasonable period to redeem obligations the proceeds of which were used to provide the financing, or the financing is refunded as described in section 146(i)(6). In addition, no allocation is required when the tax-exempt bonds are described in the preceding sentence and either:

• 50% or more of the aggregate basis of the building and the land on which the building is located (defined in Land on which the building is located below) is financed with those tax-exempt bonds; or

• 25% or more of the aggregate basis of the building and the land on which the building is located (defined in Land on which the building is located below) is financed with those tax-exempt bonds, the bonds are issued after 2025, the bonds provide the financing for at least 5 % of the aggregate basis of such building, and the building is placed in service in tax years beginning after 2025.
  However, the owner must still get a Form 8609 from the appropriate housing credit agency (with the applicable items completed, including an assigned BIN).

  • The last sentence in the second paragraph of Line 1a should read as follows.

If the building is financed by tax-exempt bonds described in Tax-exempt bonds , earlier, for which no allocation is required, you will leave line 1a blank.
The next revision of the instructions will include these updates.