New Market Tax Credits (NMTCs) are provided to individual and corporate tax payers. Credits are provided against federal income taxes for taxpayers that make certain investments. Qualifying taxpayers make a “Qualified Equity Investment” (QEI) in a “Qualified Community Development Entity” (CDE). Typically the investments are expected to create jobs or provide measureable improvements in lives of residents in low-income communities or targeted populations. The federal government defines the areas for which the investment qualifies; the investment must be in a low-income community or for targeted populations, defined as a U.S. Census tract with a poverty rate of at least 20 percent or with median family incomes that do not exceed 80 percent of area median incomes.1 Capital investments examples include mixed use residential, office space, retail centers, schools, hospitals, and community centers.
- Publication date: April 2019