Historic Tax Credit FAQs

• Federal project eligibility requirements: https://www.nps.gov/subjects/taxincentives/eligibility-requirements.htm
• State project eligibility requirements: Minnesota Part A and Minnesota Part B Instructions 

This depends on your specific tax situation. Consult a qualified tax advisor or tax attorney. Helpful resources:

• Minnesota Department of Revenue – Choosing a Tax Preparer: https://www.revenue.state.mn.us/choosing-tax-preparer
• IRS Rehabilitation Credit FAQs: https://www.irs.gov/businesses/small-businesses-self-employed/rehabilitation-credit-historic-preservation-faqs
• Minnesota Rehabilitation Credit Information: https://www.revenue.state.mn.us/historic-structure-rehabilitation-credit

• It is individually listed in the National Register of Historic Places; or,
• It contributes to a listed National Register of Historic Places historic district or local historic district that has been certified by NPS for tax credit purposes; or,
• It may be eligible for listing, and you are willing to complete a Preliminary Determination of Individual Listing (PDIL) and the full listing process. Properties must complete a full listing process to be considered a Certified Historic Structure (a requirement to claim the credits). To learn more, visit the National Register Information Page.

QREs are defined by the IRS. Review IRS Website and the QRE white paper for details.

Projects of all sizes may qualify. Choosing to participate in the Historic Tax Credit program is a personal business decision. We welcome projects of all sizes, including small projects. All projects must meet the federal "substantial rehabilitation test" within two years (or within five years for multi phase projects).

Yes, there are fees:

• Federal application fees can be found here.
• State fees are listed in the Minnesota Part A and Minnesota Part B instructions found here.

• To receive the State Credit, a project must apply for and be allowed the Federal Credit.
• Projects may apply for the Federal Credit alone.

No. However, many applicants find historic consultants helpful, especially for large or complicated projects.  A project team may include an architect, engineer, historic preservation consultant, attorney, accountant, skilled craftsperson, and the building contractor.

No. The State Historic Preservation Office must act impartially. MNSHPO staff does not endorse and will not provide preferential treatment to any private organization or individual. We strongly recommend checking references, reviewing previous projects, and conducting careful interviews prior to contracting for services.

The Minnesota Historical Society website hosts a list of consultants who have expressed an interest in conducting historic tax credit work. This link is provided as a convenience and does not imply endorsement: https://www.mnhs.org/preservation/directory. Additionally, AIAMN may be a helpful resource: https://www.aia-mn.org/consultant-directory/.

Yes, staff can make site visits as needed and when staff capacity allows. Site visits are useful for questions about eligibility, design, or unforeseen conditions. Guidance offered during visits is not binding; only NPS can make final determinations.

No. State Historic Preservation Office staff cannot provide professional services, referrals, or edit application materials. Questions and comments asked by MNSHPO during project reviews are intended to help strengthen an application.

• State Historic Preservation Office economic impact reports include case studies. View the economic impact reports on the Minnesota State Historic Preservation Office website.
• The National Park Service highlights tax credit projects on their website.

Yes. All work must meet the Secretary of the Interior's Standards for Rehabilitation.

When followed, the Standards preserve the historic character of the building for the future. They take into consideration economic and technical feasibility. A project meets the Standards when all work is consistent with the property’s historic character. Key points:

• The Standards apply to the entire historic property—interior, exterior, and site.
• The cumulative effect of all work must be consistent with the building’s historic character.
• Minnesota State Historic Preservation Office staff can advise the project team on meeting the Standards, but NPS makes final decisions.
• Project teams should be familiar with the Standards and how to apply them.
• Learn more: Guidelines for Rehabilitating Historic Buildings (U.S. National Park Service)

Yes. All proposed work will be reviewed and needs to cumulatively meet the Standards, specifically the Rehabilitation Standards.

• Yes. Federal recapture rules apply after you complete your project.
• Alterations made during the 5-year recapture must meet the Standards for Rehabilitation and be submitted for design review as a Federal Post Part 3 Amendment.
• If the property is disposed of or stops being an investment property, recapture may apply.

Spaces without tenants must still be completed to a final condition that meets the Standards. “White boxing” is a common approach. To learn more visit National Park Service website: https://www.nps.gov/subjects/taxincentives/interiors-historically-finished-secondary-spaces.htm.

Phased projects have two or more distinct construction stages that are part of a larger plan. Phases are often identified in the initial architectural plans, before rehabilitation begins. Many projects have only one phase of work and therefore do not require a phase plan. For more information about phasing from the IRS visit their FAQ.

Often only fully designed phases are included in the initial the Part 2, with later phases submitted as Part 2 Amendments as they become ready. When submitting later phases, clearly identify which phase is included in the Amendment. ALL phases must be submitted and approved before the allocation certificate can be issued. A phased rehabilitation plan:

• consists of two or more distinct stages
• outlines the construction stages in the Part 2: Description of Rehabilitation
• separates the work out by phase
• provides estimated start dates
• includes any available construction plans

The National Park Service and the State Historic Preservation Office use the phase plan to preliminarily assess if the proposed work meets the Standards and determine when a phase is completed.

In Minnesota, phase plans help track when all phases have been approved by the National Park Service (NPS) and  a State Allocation Certificate may be issued. The Allocation Certificate cannot be issued until all phases have been submitted for review and approved by NPS.

• Tenant buildouts or other work are not fully designed.
• If your project needs a phase advisory determination confirming that a phase appears to meet the Standards (however, no decisions are binding until the entire project is completed).
• Phased plans may allow your project to use a longer measuring period for tax purposes. See IRS FAQ for more information.

To stay on the desired schedule, project should submit complete applications and provide timely responses to the State Historic Preservation Office’s requests for more information. Projects should also account for project preparation time prior to application and to create responses to reviewer questions (The length of the application period for a project is most often determined by the amount of time needed for research, planning, and design):

• State Historic Preservation Office typically takes 30-days per submission—some applications require multiple submissions and review periods.
• National Park Service follows a recommended 30-day review period.

• Submit a strong, well written, and documented federal Part 1 application.
• Identify character defining features and historic materials in Part 1 application.
• Work with your project team to retain character defining features and historic materials during design and construction.
• Connect with Minnesota State Historic Preservation Offices staff early for guidance or site visits.
• Submit clear, complete applications in which the proposed work meets the Standards to reduce follow up questions and improve the chance of timely National Park Service approval.

• State Credit: No. You must apply to both the State and Federal program before rehabilitation begins.
• Federal Credit: Yes, but at your own risk. Unapproved work that does not meet the Standards may require costly corrections or may result in denial.

• For the State Credit, the building must be placed in service within three calendar years of the Allocation Certificate date. The allocation certificate is issued after all phases of your project have been submitted and certified by National Park Service. For example, if the allocation certificate was issued on 5/15/26, it is viable until 12/31/29 (rather than 5/15/29).
• Qualified Rehabilitation Expenditures (QREs) end on the calendar year the project is placed in service.
• Refer to the Federal Regulations regarding the federal credit.

Yes. You may submit the federal Part 2 before the National Park Service approves the federal Part 1. Additionally, you may submit the federal Part 1 and Part 2 at the same time (along with Minnesota Part A). However, the federal Part 2 application will not be reviewed by Minnesota State Historic Preservation Office staff until the federal Part 1 application is forwarded with a positive recommendation onto NPS by the State Historic Preservation Office National Register staff.

Federal Part 1s are important tools in the tax credit project design phase and the review process. First, the federal Part 1 application documents the building's current condition and determines if a building can be certified to participate in the program.  In addition, federal Part 1 applications help your project team identify and consider historic materials and features within the design. Also, Part 2 reviewers use the Part 1 to determine what proposed work may or may not meet the Standards.   It is highly recommended that Part 1s be submitted as far in advance of the Part 2 as possible, so that there is no delay.

• A complete Minnesota Part A, with the federal Part 2, submitted to the State Historic Preservation Office before the rehabilitation begins
• Minnesota Part A is approved by the State Historic Preservation Office
• Federal Part 2 is approved by the National Park Service (all phases included, if applicable)
• Project meets the federal substantial rehabilitation test as defined in 47(c)(1)(C) of the Internal Revenue Code
• The building is a Certified Historic Structure

• An Allocation Certificate must be issued
• Construction work must be completed prior to submitting the federal Part 3 and Minnesota Part B
• A complete Minnesota Part B application and all required supporting Part B materials, including fees, received and approved by the State Historic Preservation Office
• The project is placed in service (as documented in the federal tax credit Part 3- Request for Certification of Completed Work application)
• National Park Service certification of federal Part 3 received by the State Historic Preservation Office
• Project is completed within three (3) calendar years of the Allocation Certificate
• Property listed in the National Register of Historic Places

A building that is:

• Individually listed in the National Register
• Contributing to a listed National Register historic district
• Contributing to a local historic district that has been certified by the Secretary of the Interior for the purposes of the Historic Tax Credit program.

• Search the Minnesota Statewide Historic Inventory Portal (MnSHIP) Public Map, 
• email the Minnesota National Register of Historic Places staff at SHPONRHP.ADM@state.mn.us, or 
• call 651-201-3287.

Complete a federal Part 1 if your building:

• Is within the boundaries of a listed historic district (i.e. commercial historic district); or
• Is within the boundaries of an individually listed property with multiple buildings (i.e. industrial complex); or
• Has not been evaluated for listing in the National Register. 

• A PDIL is a preliminary determination regarding the individual eligibility of a property for listing in the National Register.
• PDIL applications are evaluated using the National Register Criteria for evaluation.

Instructions for completing the federal Part 1 application can be found in the NPS Historic Preservation Certification Application Instructions.

Failure to receive final National Register certification, within 30 months after the date the taxpayer filed a tax return on which the credit was claimed, has federal implications (see the IRS FAQ) However, if you plan on claiming Minnesota State Historic Tax Credits, the property must be listed before an Allocation Certificate or Credit Certificate can be issued.

The National Register listing process can take at least 12 to 18 months. For instructions on completing and submitting a National Register documentation, visit the MN NRHP website.

No, you may move straight to a federal Part 2 application.

Yes: https://www.nps.gov/subjects/taxincentives/check-project-status.htm

No, the NPS does not provide updates as nominations move through the process.

Yes, SHPO staff will notify the preparer and property owner when a listing is official.