Archived News
2009 NMTC Allocation Awards
October 30, 2009, the Community Development Financial Institutions Fund (CDFI Fund) of the U.S. Department of Treasury awarded $5 billion of new markets tax credit (NMTC) investment authority to 99 Community Development Entities to stimulate investment and job creation in low-income communities and to benefit targeted populations. The allocation includes $1.5 billion of NMTC authority awarded to 24 Community Development Entities authorized by the American Recovery and Reinvestment Act of 2009. A list of the award recipients is available at cdfifund.gov.
2009 Round of NMTC Allocations Opens - $3.5 Billion Available
January 16, 2009, CDFI Fund announced the opening of the seventh round of New Markets Tax Credit allocations for $3.5 billion of equity investments. The CDFI Fund announcement states: “To date organizations awarded tax credits have raised $12.6 billion in equity investments. In fact, awardees have raised over $1 billion of equity in the past six months alone, demonstrating that the NMTC Program has been a critical tool for economic development during a period of tightened credit markets.” The Notice of Allocation Availability addresses the application process and provides various deadlines that must be met by applicants. The application deadline is 5 pm ET on April 8, 2009.
2008 New Markets Tax Credit Allocation Awards
On October 20, 2008, the Community Development Financial Institutions Fund (CDFI Fund) awarded $3.5 billion of new markets tax credit (NMTC) investment authority to 70 organizations to stimulate investment and job creation in low-income communities and to benefit targeted populations.
New Markets Tax Credit Extension
October 3, 2008, the Emergency Economic Stabilization Act of 2008 was enacted, including a one-year extension of the NMTC, with $3.5 billion of investment authority for 2009.
September 30, 2008, CDFI Fund issued guidance to CDEs that serve targeted populations and certain geographic areas. All certified CDEs may serve targeted populations within their approved service area.
NMTC Proposed Amendments to Treasury Regulations
Proposed regulations relating to NMTC issued August 11, 2008 modify and clarify the “operating income” safe harbor and “reasonable expectation” safe harbor and address the implications of Community Development Entity (CDE) tax terminations. The proposed regulations will be effective on the date final regulations are published.
Targeted Populations
September 24, 2008, IRS issued proposed regulations relating to the NMTC that provide rules for determining how qualified active low-income community business (QALICB) requirements are satisfied for investments made to low-income targeted populations and GO Zone targeted populations. Written comments were due December 23, 2008. The public hearing was January 22, 2009. Final regulations are anticipated to be issued in 2010.
NMTC Awards
On June 1, 2006, the Community Development Financial Institutions Fund (“CDFI Fund”) announced the 63 organizations awarded tax credits for $4.1 billion in investments under the New Markets Tax Credit program, including $600 million for specific investment in the redevelopment of the Hurricane Katrina Gulf Opportunity Zone. The awards range from $2 million to $143 million. As reported by the CDFI Fund, most of the recipients committed to provide investments in areas of greater economic distress and to provide either equity or debt that is at least 25% below market and/or is characterized by multiple concessionary features. Most of the recipients committed to invest at least 95% of qualified equity investments received in qualified low-income community investments.
For the 2007 allocation round, the CDFI Fund is authorized to issue up to $3.9 billion in New Markets Tax Credit investment authority, including $400 million dedicated to the Gulf Opportunity Zone.
Targeted Populations Guidance
On June 30, 2006, the CDFI Fund and the Internal Revenue Service issued Notice 2006-60 providing guidance regarding the designation of certain targeted populations under the New Markets Tax Credit program, including a special designation in the Gulf Opportunity Zone as “low-income communities.” Taxpayers may rely on this notice until regulations are issued. The Notice provides guidance as to the applicable requirements for a qualified active low-income community business when its activities involve such targeted populations.
