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September 1, 2021

Treasury announces it awarded $5 billion in New Markets Tax Credit program

On September 1, 2021, the Treasury Department announced that it awarded $5 billion in New Markets Tax Credit (NMTC) allocation to successful Community Development Entities (CDEs) from the 2020 application round. The $5 billion was awarded to 100 CDEs headquartered in 34 states and the District of Columbia.

The NMTC program, administered by Treasury's Community Development Financial Institutions (CDFI) Fund, was established in December 2000 by Congress. The program was designed to encourage investments into operating businesses and real estate projects located in low-income communities. It allows individual and corporate investors to receive a tax credit against their federal income tax for making qualified equity investments in investment vehicles called CDEs. An investor's credit totals 39% of the investment in a CDE and is claimed over seven years. A CDE must use substantially all of the investment to make qualified investments in low-income communities. In the previous 17 rounds, the CDFI Fund allocated 1,354 awards totaling $66 billion in tax credit authority.

In the latest round, CDFI received a total of 208 applications, requesting a total of $15.1 billion. Of all the applicants, 100 CDEs (about 48% of the total applicant pool) received the $5 billion in allocations (about 33.1% of the total requested amount). The average allocation award in this round ranged from $15 million to $65 million. About 78% of the amounts awarded went to loans to, or equity investments in, business; 22% went to loans to, or equity investments in, real estate.


First, congratulations are due to all 100 successful CDEs. Second, now that the award has been announced, CDEs will be spending some time further evaluating pipeline and potential projects. It is incumbent on taxpayers with projects that could benefit from a sub-allocation of NMTCs to reach out promptly to CDEs that received awards. The CDEs are expected to place a significant emphasis on projects that directly benefit low-income populations in economic distress. One hundred successful CDEs have committed to providing at least 75% of their investments in areas with 1) multiple indicia of economic distress; 2) significantly greater indicia of economic distress than required by NMTC Program rules; or 3) high unemployment rates.

Third, CDEs will now also be looking towards the application round for 2021. No timetable has been set, but historically the application round opens two to three months following the release of awards. Taxpayers and potential CDEs should start considering their options for the 2021 application.


Contact Information
For additional information concerning this Alert, please contact:
New Markets Tax Credit Group
   • Mike Bernier (
   • Megan Knutson (
   • Michael Roney (