Originally enacted by Congress in 2000, Federal New Market Tax Credits create win-win situations: powerful incentives for private investment, and economic development in low-income communities. They close funding gaps and move qualified projects across finish lines, typically subsidizing 15 to 20 percent of capital cost.
Learn more about New Market Tax Credits and participants:
- A Tax Credit Investor, who makes an equity contribution at a discounted rate in exchange for a 39 percent tax credit spread over 7 years
- The Leveraged Lender that provides financing and receives interest payments;
- A Fund that receives the equity contribution and loan proceeds
- A Community Development Entity (CDE), which serves as the financial intermediary and administers the program
- The Qualified Active Low Income Community Business (QALICB), recipient of NMTC benefits