The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced that 87 community development entities (CDEs) have been selected to receive $3.5 billion in tax credits under the under the calendar year 2013 round of the New Markets Tax Credit (NMTC) program. The 87 CDEs receiving awards were selected from a pool of 310 applicants that requested more than $25.9 billion. The 2013 allocatees are headquartered in 32 different states and the District of Columbia, and they have identified principal service areas that will cover nearly every state in the country and the District of Columbia. A list of the organizations selected and additional information about today’s announcement can be found on the CDFI Fund’s web site.
The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in vehicles known as Community Development Entities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. The Community Development Entities in turn use the capital raised to make investments in low-income communities. Community Development Entities must apply annually to the CDFI Fund to compete for New Markets Tax Credit Program allocation authority.
“Over $31.1 billion of New Markets Tax Credit transactions have been reported from the program’s inception through the end of fiscal year 2012, and over 74 percent of these were made in severely distressed communities, surpassing even the program’s requirements,” said Dennis Nolan, Acting Director of the Community Development Financial Institutions Fund. “