PROGRAM: The New Markets Tax Credit (NMTC) Program was enacted in December 2000 as part of the Community Renewal Tax Relief Act. The NMTC Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs).
PROGRAM GOAL: To stimulate private investment in low-income urban and rural communities while increasing the flow of investment capital to such areas.
TYPE OF ASSISTANCE: Tax credit
TYPICAL STRUCTURE: The credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year credit allowance period. Substantially, all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities. In each of the first three years, the investor receives a credit equal to five percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is six percent annually. Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period.
INCENTIVES: Credits provided toencourage the private investment in low-income urban and rural communities.
BENEFITS: The program provides a benefit for taxpayers who wish to invest in low-income neighborhoods/ CDEs.
ELIGIBILITY: To qualify as a CDE, an entity must be a domestic corporation or partnership that: 1) has a mission of serving, or providing investment capital for, low-income communities or low-income persons; 2) maintains accountability to residents of low-income communities through their representation on a governing board of or advisory board to the entity; and 3) has been certified as a CDE by the CDFI Fund.
NMTCs are allocated annually by the Community Development Financial Institution (CDFI) Fund to CDEs under a competitive application process. These CDEs then offer the credits to taxable investors in exchange for stock or a capital interest in the CDEs.
For assistance, the National Development Council (see contact information below) is able to assist and provide guidance in the process of initiating a New Markets Tax Credit. As a supplement reference, please refer to the New Markets Tax Credit Allocation Question and Answer Document prepared by The Community Development Financial Institutions to further gather information concerning the NMTC Program.
Download Application
Download Application Instructions
Download Certification Application
Q & A
NMTC Resources:
Housing and Economic Development Corporation
HEDC New Markets Tax Credits, Inc.
51 East 42nd Street
Suite 300
New York, NY 10017
Phone: (212) 682-1106
Fax: (212) 573-6118
Website: www.nationaldevelopmentcouncil.org
CDFI Fund
601 13th Street, NW, Suite 200 South
Washington DC, 20005
Phone: (202) 622-8662
Fax: (202) 622-7754
Website: www.cdfifund.gov or
http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5
Email:cdfihelp@cdfi.treas.gov
New York Office
The National Development Council
51 East 42nd Street
Suite 300
New York, NY 10017
Phone: (212) 682-1106
Fax: (212) 573-6118
City of Cincinnati, Department of Community Development
Gerald Fortson, Devopment Officer
805 Central Avenue, Suite 700
Cincinnati, Ohio 45202
Phone: (513) 352-1926
Fax: (513) 352-6257
gerald.fortson@cincinnati-oh.gov
