Treasury opens New Markets Tax Credit program, 2015 round

Treasury opens New Markets Tax Credit program, 2015

The Treasury Department’s Community Development Financial Institutions (CDFI) fund today released its “notice of allocation availability” (NOAA) for the calendar year 2015 round of the New Markets Tax Credit (NMTC) program.

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The NOAA [PDF 183 KB] authorizes up to $5 billion in tax credit allocation authority available for the calendar year 2015 round, pending congressional authorization to extend the credit that expired December 31, 2014. The CDFI fund posted the NOAA on its website in anticipation of its publication in the Federal Register later this week.  

Important deadlines

  • Community development entity (CDE) certification application—November 6, 2015
  • NMTC electronic application—December 16, 2015
  • Prior allocatees' issuance of qualified equity investments—January 29, 2016

KPMG observation

This new round of NMTC allocations allows qualified community development entities to apply for NMTC allocations. Community development entities (CDEs) use the NMTC allocation to attract investors to make qualified equity investments (QEIs) in the community development entity in exchange for NMTCs. The community development entity, in turn, may use the QEI to make low-interest loans to businesses located in low-income communities. The NMTC to the investor is equal to 39% of the cost of the QEI and is claimed over a seven-year period.  Businesses in low-income communities benefit from the below-market loans to finance their projects. 

 

For more information, contact a tax professional with KPMG’s Washington National Tax TCEAS (Tax Credit and Energy Advisory Services) group:

Susan Reaman | +1 (202) 533-3541 | sreaman@kpmg.com

Rich Blumenreich | +1 (202) 533 3032 | rblumenreich@kpmg.com

Brett Goldsberry | +1 (801) 237 1304 | brettgoldsberry@kpmg.com

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