New York State Historic Tax Credit Transfer Program – Guidelines Released

In early 2026, the New York State legislature enacted amendments to the New York State Tax Law that allow taxpayers undertaking certain historic rehabilitation projects to transfer the state historic tax credit (SHTC) separately from the federal historic tax credit. Crucial guidance was recently released by the New York State Office of Parks, Recreation and Historic Preservation (OPRHP) and sets forth guidelines for this type of transfer. 

Overview of Guidelines for SHTC Transfer

• Beginning in tax year January 1, 2026, an “Eligible Taxpayer” or “Eligible Transferor” of a “Qualified Rehabilitation Project” or a “Small Project” is permitted to transfer up to the entire SHTC allowed in that year to an “Eligible Transferee.”
• The dollar amount of the SHTC is currently capped at $5 million per certified historic structure.
• The SHTC may not be claimed prior to the first taxable year the federal historic tax credit is claimed (i.e., the year the project is placed in service).
• The SHTC shall only be transferred once to a single Eligible Transferee during the taxable year the SHTC is earned. After the SHTC is transferred to the Eligible Transferee, further sale or transfer of the SHTC is prohibited. Notwithstanding the foregoing and as further detailed in sections below, the Eligible Taxpayer or Eligible Transferor may relinquish or direct the credit to a “Qualified Not-For-Profit Intermediary” as a conduit. This relinquishment is exempt from the “one-time transfer” allowed annually under the SHTC Program.
• The Eligible Transferor submits the SHTC Transfer Application and all required documentation to the OPRHP, who then reviews and issues the Transfer Approval Certificate to the Eligible Transferee. The Transfer Approval Certificate is also submitted to the Department of Taxation and Finance (DTF). Provided the DTF determines all other requirements for claiming this credit are met, an Eligible Transferee shall be entitled to apply the transferred SHTC to a tax imposed under Articles 9-A, 11, or 33 of the New York State Tax Law.

Key Definitions 

“Qualified Rehabilitation Project”: A commercial or income-producing historic property that has been approved to receive the federal historic tax credit and meets one of the following criteria: 

1. The project is located within a census tract that is identified as being at or below 100 percent of the New York State median family income. 
2. The project is located within a state park, state historic site, or other land owned by the state that is under the jurisdiction of the OPRHP. 
3. The project is undertaken for the provision of affordable housing. 

“Small Project”: A Qualified Rehabilitation Project with qualified rehabilitation expenditures totaling $2.5 million or less.

“Eligible Taxpayer” or “Eligible Transferor”: The property owner of the Qualified Rehabilitation Project or a member, partner, or shareholder of the property owner that is specially allocated the SHTC by the property owner. 

“Eligible Transferee”: The person or entity who receives and claims the SHTC pursuant to the terms of the transfer contract and does not need to own an interest in the Qualified Rehabilitation Project or in an entity with an ownership interest in the project. 

This guidance is expected to assist developers in pushing historic projects through their pipeline, alleviate the ambiguity in the process surrounding the previously enacted amendment, and broaden the pool of potential investors.

If you have any questions regarding the content of this alert, please contact Danielle Katz, counsel, at dkatz@barclaydamon.com, or another member of the firm’s Corporate Practice Area.