Nonprofit Set-Aside

IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis) · 2026 edition · updated 2026-07-29 · United States

A portion of a state's credit ceiling is set-aside for allocation to projects involving qualified nonprofit organizations. These allocations are identified on Form 8609, line 6g, starting with the November 2003 revision of the form. If an earlier revision was used, then the state agency should be asked to confirm whether the allocation was from the nonprofit set-aside. The nonprofit entity must (1) own an interest in the property and (2) materially participate in both the development and on-going operation of the low-income project throughout the 15-year compliance period. See Chapter 6.

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▸Contents — IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis)

IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis)

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