California Tax Credit Allocation Committee

Certificated State Credit

In 2016, the Legislature provided authority for CTCAC to “certificate” state low-income housing tax credits for credit reservations made beginning in 2017. Certificated state tax credits are sold outright to investors who take no ownership interest in the housing development. This eliminates the impact of the state tax credits on an investor’s federal tax liability, allowing the investor to offer higher tax credit pricing.

Applicants to CTCAC must elect certificated state tax credits in the original application, and the applicant must be a non-profit entity. The ownership entity may be both for profit and non-profit, but the named applicant must be a non-profit entity.

The minimum pricing for certificated state tax credits is eighty cents per dollar of credit.

The applicant may revoke the certification of the state tax credits at any time before CTCAC issues the tax form. Once California Form 3521A is issued, the election is irrevocable.

The purchaser of certificated state tax credit is not liable for the housing development’s compliance with the LIHTC program. The project ownership entity remains fully liable for program compliance.

Sale of certificated state tax credit must be reported to CTCAC using CTCAC’s prescribed form (below). Sale of credit occurs when the applicant or project owner receives payment from the certificated state tax credit purchaser. If this is done in installments, the Notice of Sale may be made as late as 10 days after the final installment. Certificated state tax credits may be resold multiple times, the one-time resale limit has been eliminated. Each sale must be reported to CTCAC.

Send completed Notice of Sale forms to Cheng Lee at

If you have questions please contact Diane SooHoo at

Certificated State Credits Webinar – 12/18/2018