July 15, 2005
JS-2534
Fourth Round of New Markets Tax Credit Competition
Opens
$3.5 Billion in New Markets Tax Credits Available
The U.S. Department of the Treasury announced today the opening of the fourth round of competition for the allocation of up to $3.5 billion in tax credits under the New Markets Tax Credit (NMTC) Program. The NMTC Program attracts private-sector capital investment into the nation's urban and rural low-income areas to help finance community development projects, stimulate economic growth and create jobs.
"The New Markets Tax Credit program spurs development and creates jobs in communities most in need," said Treasury Secretary John W. Snow. "By leveraging private sector involvement, we're putting these communities on a path to continued development and prosperity."
The NMTC program, established by Congress in December of 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities. Successful applicants are selected only after a competitive application and rigorous review process that is administered by Treasury's Community Development Financial Institutions (CDFI) Fund.
"The pace with which capital is being raised and its deployment into local projects is impressive for such a new program," said CDFI Fund Director Arthur Garcia. "To date, 87 of the allocatees from the first two rounds have already raised $2.2 billion in equity from investors, and this capital is already starting to be put to use funding deals in our nation's low-income communities." Through the first three rounds of the NMTC Program, the CDFI Fund has made 170 awards totaling $8 billion in tax credit allocation authority.
Guidance and application materials on the fourth round of the NMTC Program are available on the CDFI Fund's website at www.cdfifund.gov. The allocation application deadline is
The CDFI Fund is offering a free interactive video teleconference on