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Tax Credit Basics

Introduction to Historic Tax Credits

Viking Manufacturing Company Building - ManhattanTax credits provide a financial incentive to rehabilitate a historic building per the Secretary of the Interior's Standards for Rehabilitation. The State Historic Preservation Office (SHPO) advises and administers two historic rehabilitation tax credit programs that are available for buildings in Kansas.

The Federal tax credit program provides a federal income tax credit equal to 20% of total qualified expenses for a building that:

  1. Is listed on the National Register, a designated "Contributor" to a listed historic district, or is determined potentially eligible for the National Register through Part 1 of the application process; and
  2. Is used for an income-producing (i.e. commercial) purposes; and 
  3. Where the property owner is spending more on the rehabilitation than the calculated worth or "adjusted basis" of the building.

To find out more about the Federal Historic Tax Credit Program click HERE.

The State tax credit program provides a state income tax credit equal to a percentage of the qualified rehabilitation expenses. These credits can be used to offset income taxes, premium taxes, or privilege taxes payable to the state of Kanas. To qualify for the state tax credit program:

  1. The building must be listed in the National Register of Historic Places or Register of Historic Kansas Places before application is made; and 
  2. The property owner must submit an application BEFORE work begins on the project; and 
  3. The owner must be spending more than $5,000 on the rehabilitation of the building as part of the project.  

To find out more about the State Historic Tax Credit program click HERE.

If you qualify for and intend to take advantage of both the federal and state tax credit programs, please follow the federal links for the application process.

If you are unsure which program(s) your project may qualify for, use our flow chart to help answer your question.


Preparing for a Historic Tax Credit Project

Gather information

Regardless of the type or size of your project, learning about your building and getting familiar with the programs, requirements, permits, timeframes, and parameters of your project is helpful. Read through all of the program information and instructions. Gather details about the work needed on the property and how you expect the work to be done. 

Contact the SHPO to discuss your potential project

Please feel free to contact the State Historic Preservation Office (SHPO), to discuss the project, set up a site visit, review the Standards for Rehabilitation, or discuss any other questions you may have.  Please call SHPO staff at 785-272-8681 ext. 240 or e-mail kshs.taxcredits@ks.gov

Contact your financial advisor

Please contact the Internal Revenue Service or the Kansas Department of Revenue with any questions related to taxation and personal taxes.

Consult a tax professional before applying for, claiming, or selling state or federal rehabilitation tax credits. Certain laws may limit your ability to claim the credits and other tax implications may apply.

  • Beginning January 1, 2007 taxpayers wishing to claim insurance proceeds used in a certified rehabilitation as qualifying expenses for purposes of the tax credits, must claim those insurance proceeds as income on their income tax returns. If a taxpayer does not report the insurance proceeds as income, any expenditures made to the qualified historic structure with the insurance proceeds will not be used to compute the state or federal historic rehabilitation tax credit.
  • Changes to the federal tax code in December 2017 may have make use of the federal credits more complex for some property owners.