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October 28, 2022

Treasury announces $5 billion award for New Markets Tax Credit program for CY 2021

On October 28, 2022, the Treasury Department announced that it awarded $5 billion in New Markets Tax Credit (NMTC) allocations to successful Community Development Entities (CDEs) from the 2021 application round. The $5 billion was awarded to 107 CDEs headquartered in 35 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 investment in operating businesses and real estate projects 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 18 rounds, the CDFI Fund allocated 1,461 awards totaling more than $71 billion in tax credit authority.

In the latest round, CDFI received a total of 199 applications, requesting a total of $14.7 billion. Of all the applicants, 107 CDEs received the $5 billion in allocations. The average allocation award in this round ranged from $25 million to $60 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 107 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. The 107 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 2022. 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 2022 application.


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