New Markets Tax Credits
The New Markets Tax Credit (NMTC) program originated in the Community Renewal Tax Relief Act of 2000, which added Section 45D, New Markets Tax Credit, to the Internal Revenue Code.
Code Section 45D permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs). The credit provided to the taxpayer is equal to 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period. Although this tax credit program is still in its infancy, it promises to be a useful source of financing for community and economic development in low-income areas throughout the country. Our areas of focus in this service area include all aspects of the NMTC program.