$2B in 'New Markets' Tax Credits Awarded

The U.S. Treasury Department has awarded $2 billion under its third round of New Markets Tax Credits to 41 entities, including states, cities, and private organizations that are making qualified equity investments in designated community development entities.The NMTC program grants federal income tax credits to qualified equity investments in designated CDEs, just as low-income housing tax credits are granted in conjunction with low-income community development investments. Investors receive credits at up to 39% of the cost of their investment, claimed over a seven-year credit allowance period. During the first three years, investors receive credit at 5% of the total amount paid for the stock, or capital interest at the time of purchase. For the remaining four years, they receive a 6% credit annually and are not allowed to redeem their investments in CDEs before the end of the seven-year period.