November 21, 2022
CDFI opens 2022 round of New Markets Tax Credit program allocations
In a Notice of Allocation Availability (NOAA), the Treasury's Community Development Financial Institutions Fund (CDFI Fund) announced on November 18, 2022, an allocation of $5 billion for the calendar-year 2022 round of the New Market Tax Credit (NMTC) program.
Congress established the NMTC Program in 2000 to permit individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments (QEIs) in community development entities (CDEs). The credit totals 39% of the investment and may be claimed by the investor over seven years. The CDE must use substantially all the investment to make qualified investments in low-income communities. Treasury's CDFI Fund, which selects successful applicants, has allocated $71 billion in tax credit allocation authority through the NMTC program.
Minor changes to 2022 round
There are some minor changes to the NMTC program for 2022, including:
Now that the NOAA has been released, CDEs will be finalizing their pipeline of projects for submission in their NMTC application in hopes of successfully receiving an award. Taxpayers with projects that could benefit from a NMTC allocation through a CDE may want to get them into CDE pipelines now to increase the chance of receiving an award to assist funding projects.
Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor