New Market Tax Credits
The New Markets Tax Credit (NMTC) was designed to increase the flow of capital to businesses and low-income communities by granting private investors a modest tax incentive. Over the past 10 years, the NMTC has proven to be an effective, targeted and cost-efficient financing tool valued by businesses, communities and investors across the country.
The NMTC was authorized in the Community Renewal Tax Relief Act of 2000 as part of an effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies.
The NMTC program attracts capital to low-income communities by providing private investors with a federal tax credit for investments made in businesses or economic development projects located in some of the most distressed communities in the nation – census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median.
To learn more about the NMTC program, click here for the Community Development Financial Institutions Fund’s presentation.