The U.S. Department of Treasury’s Community Development Financial Institutions Fund (CDFI Fund) has opened its 2012 round of competition for New Markets Tax Credits (NMTCs).
This year marks the 10th award round of the program, which was created in 2001. However, the program still needs to be extended by Congress after expiring last year.
The CDFI Fund plans to make up to $5 billion in credits available, pending congressional authorization. It has released its 2012 Notice of Allocation Availability, which is expected to be published in the Federal Register July 19.
The key deadlines are:
- Community Development Entities (CDEs) certification application: Aug. 3, 2012;
- NMTC program application: Sept. 12, 2012; and
- Prior allocatees' issuance of qualified equity investments: Oct. 31, 2012.
Materials and information can be found at www.cdfifund.gov. In addition, a Webinar will be held July 18, and the CDFI Fund also plans to host two conference calls to answer questions July 24 and July 26.
The NMTC program aims to spur investment of private-sector capital into distressed communities by providing a tax credit to corporate or individual taxpayers who make qualified equity investments in designated CDEs. The CDEs, in turn, invest the capital raised into projects and businesses in low-income communities. The credit provided to the investor totals 39 percent of the investment in a CDE and is claimed over a seven-year credit allowance period.
Since the program’s inception, the CDFI Fund has made 664 awards—totaling $33 billion in tax credit allocation authority—to CDEs. The equity raised through the tax credit is stimulating economic growth, supporting job creation and fostering small business growth in distressed communities across America.