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September 22, 2023

Treasury awards $5 billion in New Markets Tax Credit allocations for CY 2022

On September 22, 2023, the Treasury Department announced that it awarded $5 billion in New Markets Tax Credit (NMTC) allocations to successful Community Development Entities (CDEs) from the 2022 application round. The $5 billion was awarded to 102 CDEs headquartered in 36 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 19 rounds to date, the CDFI Fund allocated 1,563 awards totaling more than $76 billion in tax credit authority.

In the latest round, CDFI received a total of 197 applications, requesting a total of $14.8 billion. Of all the applicants, 102 CDEs received the $5 billion in allocations. The allocation award in this round ranged from $25 million to $65 million. About 82% of the amounts awarded went to loans to, or equity investments in, business; 18% went to loans to, or equity investments in, real estate.


First, congratulations are due to all 102 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 102 successful CDEs have committed to providing at least 85% 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 2023. 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 2023 application.


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

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor