Investors and communities benefit from NMTCs.
The NMTC (New Markets Tax Credit) Program is a federal program that incentivizes community development and economic growth through the use of tax credits, attracting private investment to distressed communities. The Community Development Financial Institutions Fund (CDFI) allocates NMTCs with a competitive application process.
Investors receive a tax credit against their federal income tax in exchange for making equity investments in CDEs (Community Development Entities). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years.
The credits are generous but the legal structure of these investment activities is complex. Experienced attorneys and accountants are needed to complete the documents and flow of funding. The MarksNelson team can help. If you’re thinking of how to leverage the benefits of a New Markets Tax Credit, reach out