New Markets Tax Credit Program
The New Markets Tax Credit (NMTC) program provides financing with extremely favorable terms to businesses and real estate developers/owners who are managing development projects in underserved geographic areas.
The NMTC program permits taxpayers to receive a credit against federal income taxes for making Qualified Equity Investments (QEIs) in designated Community Development Entities (CDEs). In order to obtain the credit, all of the QEIs must be used by the CDE to provide investments in Low-Income Communities (LICs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period. Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period.
These investments cover financing gaps, allowing projects to be completed and enhanced with community-oriented components that generate a measurable impact.