The New Markets Tax Credit (NMTC) Program was authorized by Congress in December 2000 as part of the bi-partisan Community Renewal Tax Relief Act of 2000 (PL 106-554) and amended through the American Jobs Creation Act of 2004 (PL 108-357). The NMTC was further amended by the Tax Relief and Health Care Act of 2006 (PL 109-432) and extended through 2008. The rule governing NMTC is Section 45(D) of the Internal Revenue Code.
Administered by the CDFI Fund of the U.S. Department of the Treasury, the NMTC Program was created to stimulate investment and economic growth in low-income communities that lack access to the capital needed to support and grow businesses, create jobs, and sustain healthy, local economies. By providing private investors with a federal tax credit, the Program facilitates investments made in job creating businesses or catalytic real estate and economic development projects located in some of the most distressed communities in the nation, i.e. census tracts where the individual poverty rate is at least 20% or where median family income does not exceed 80% of the area median.
Since its inception, the NMTC Program has generated investment in low-income communities across all 50 states, the District of Columbia and Puerto Rico. According to the CDFI Fund, the program has raised more than $31 billion in private capital, leveraging about $8 of private capital for every $1 of NMTC investment in distressed communities.
The New Markets Tax Credit:
How it Works
A survey by the New Markets Tax Credit Coalition found that the program has:
Helped support more than 15,000 businesses in low-income communities;
Developed or rehabilitated over 68 million square feet of real estate;
Created more than 500,000 jobs.