The Department of Treasury has released temporary and proposed income tax regulations governing the reissuance of mortgage credit certificates (MCCs) when an MCC related mortgage is refinanced. The refinancing provision is an exception to the general requirement that the mortgage in an MCC program cannot be used when refinancing an existing mortgage.

Under the MCC program legislation, the Internal Revenue Service (IRS) is authorized to issue regulations to permit the reissuance of MCCs to the same holder in the event of refinancing of the mortgage under conditions designed to prevent any increase in the allowable credit. The regulations apply to reissuances of MCCs with respect to certain past refinancings as well as current or future refinancings of the residence. However, an MCC must be reissued within ONE YEAR after the refinancing of the residence.

A reissued certificate is effective as of the date of the mortgage refinancing. The holder of a reissued certificate may file an amended federal income tax return to claim credits for the period from the date of refinancing.

According to the regulations in IRS Publication 530, the following requirements for a reissued MCC must be met:

1. It must be issued to the holder(s) of the existing certificate for the same property.
2. It must entirely replace the existing certificate.
3. The certified indebtedness on the reissued certificate cannot exceed the outstanding balance shown on the existing certificate.
4. The credit rate of the reissued certificate cannot exceed the credit rate of the existing certificate.
5. The reissued certificate cannot result in a larger amount on line 3 than would otherwise have been allowable under the existing certificate for any tax year.

1. Copy of original certificate or reissued certificate
2. Copy of new note
3. Copy of original note
4. Copy of most recent year's federal tax return
5. Copy of new Settlement Statement
6. Current telephone number