Tax Credit Program and Qualifying Cesspools
What is Act 120?
Act 120 provides a temporary income tax credit for the cost of upgrading or converting a qualified cesspool to a septic tank system or an aerobic treatment unit system, or connecting to a sewer system. A taxpayer may apply for a tax credit of up to $10,000 for each qualified cesspool. Tax credits are available for five years. The tax credit starts in tax year 2016, January 1, 2016 and ends in tax year 2020, December 31, 2020. There is a $5,000,000 cap that is available for each tax year. Any taxpayer who is not eligible to claim the credit in a taxable year shall be eligible to claim the credit in the subsequent taxable years from 2017 to 2020.
When can I apply for the tax credit?
To qualify for the tax credit, work must start on or after January 1, 2016. The instructions, application and certification forms are provided below.
- Income Tax Credit Instructions | .pdf |
- Application for Income Tax Credit For a Qualifying Cesspool | .pdf |
- Qualifying Cesspool Location Certification Form | .pdf |
- Form N-350 CESSPOOL UPGRADE, CONVERSION OR CONNECTION INCOME TAX CREDIT | .pdf |
- Form N-350 Instructions |.pdf |
What is a qualified cesspool covered under Act 120?
Qualified cesspools are cesspools that are: Located within 200 feet of a shoreline, perennial stream, wetland, or within a source water assessment program area (two year time of travel from a cesspool to a public drinking water source).
Locations of qualified cesspools
Below is a list of tax map keys (TMK) of the properties that may be eligible for the tax credit. In the column, Certification Status, if it indicates Certification Required, if you are the owner of that qualified cesspool, you will be required to retain the services of a licensed engineer or licensed contractor to certify the cesspool is located within 200 feet of a shoreline, perennial stream, wetland, or source water assessment program area.
It is highly recommended that you obtain this certification first before initiating any work to upgrade your cesspool. Certification forms will be posted online by January 4, 2016. As a reminder, to qualify for the tax credit, this work needs to start on or after January 1, 2016.
List of Qualified Cesspools based on TMKs:
Hawaii | .pdf |
Kauai | .pdf |
Maui | .pdf |
Molokai | .pdf |
Oahu | .pdf |