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 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, you must submit an application with the Department of Health, Wastewater Branch. 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 Certification Form | .pdf |

What is a qualified cesspool covered under Acts 125 and 133?
Qualified cesspools are cesspools that are: Located within 500 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).  Under Act 133, large capacity cesspools that serve multiple dwellings or twenty or more persons a day.

List of qualifying cesspools that do not need certification.  Location identified by tax map key.

Hawaii

Kauai

Maui

Molokai

Oahu