Community Renewal and Tax Relief Act of 2000
Historically, low-income communities experience a lack of investment, as evidenced by vacant commercial properties, outdated manufacturing facilities, and inadequate access to education and healthcare service providers. The New Market Tax Credit Program (NMTC Program) aims to break this cycle of disinvestment by attracting the private investment necessary to reinvigorate struggling local economies. The NMTC Program attracts private capital into low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDEs). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years.
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Tax Credit
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Total Amount: $5,000,000,000 in tax credit authority
Amount Available Towards Broadband (if specified): Not specified
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Only certified CDEs are eligible to receive an allocation of New Markets Tax Credits. Certified CDEs must meet the following requirements: be a legal entity at the time of application; have a primary mission of servicing low-income communities; and, maintain accountability to residents of its targeted low-income communities.
CDEs use their authority to offer tax credits to investors in exchange for equity in the CDE. Using the capital from these equity investments, CDEs can make loans and investments to businesses operating in low-income communities on better rates and terms and more flexible features than the market
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NMTC Help Desk (202) 653-0421, cdfihelp@cdfi.treas.gov
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March 2023