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Congressional Members Urge Permanent Extension of New Markets Tax Credit

On October 31st, 2013 seventy Members of Congress sent a letter to the House Ways and Means Committee requesting permanent extension and expansion of the IRC § 45D New Markets Tax Credit (“NMTC”). The NMTC acts as an incentive for investing in low-income communities (determined by reference to census tracts) by providing individual and corporate investors a credit against their federal income tax in exchange for investing in low-income communities. Specifically, the credit equals 39% of the Qualified Equity Investment (“QEI”) amount a taxpayer invests with a certified Community Development Entity (“CDE”). A CDE is a domestic entity certified by the Community Development Financial Institutions Fund (“CDFI”), and provides investment capital to low-income communities. The CDE invests funds from investors and leveraged lenders (typically large lending institutions) in Qualified Low-Income Community Businesses (“QLICB”). The credit is claimed over a period of 7 years subsequent to the investment, with 5% of the investment claimed in each of the first three years and 6% of the investment claimed in each of the remaining four years; these amounts are subject to recapture. Absent congressional action, the NMTC will expire on December 31st, 2013.

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Contact our team today with any tax controversy concern you’re facing. We fight every day to protect the interests of the taxpayer, and we look forward to putting you in the best tax situation possible.

GET STARTED

Contact our team today with any tax controversy concern you’re facing. We fight every day to protect the interests of the taxpayer, and we look forward to putting you in the best tax situation possible.

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