On Feb. 23, the U.S. Department of the Treasury, through its Community Development Financial Institutions (CDFI) Fund, announced that $3.6 billion in new markets tax credits were awarded in the ninth round of the New Markets Tax Credit program (NMTC Program). From an applicant pool of 314 organizations (that requested more than $26.7 billion in tax credits), the CDFI Fund selected 70 community development entities (CDEs). The principal service areas of the awardees covers nearly every state in the country, as well as the District of Columbia.
The NMTC Program was established by Congress in 2000 to spur new or increased investments into development projects located in low-income communities. The NMTC Program attracts investment capital to low-income communities. Investors in CDEs receive a credit against federal income taxes based upon the amount of their qualified equity investment. Of the required uses, the CDE may use the capital to make a qualified investment to an entity located in, among other places, qualified low-income census tracts. The credit provided to the investor totals 39 percent of the qualified investment and is claimed over a period of seven years.
As reported by CDFI Fund, the CDFI Fund has made, since the NMTC Program’s inception, 664 awards allocating a total of $33 billion in tax credit authority to CDEs.
A list of the organizations selected and additional information about today’s announcement can be found on the CDFI Fund’s web site. A searchable database of awardees from all NMTC allocation rounds to date can also be found online.