Department of the Treasury officials said the agency’s Community Development Financial Institutions Fund (CDFI Fund) has earmarked $5 billion in New Markets Tax Credits (NMTC) to spur economic growth.
The effort targets investment in low-income urban and rural communities throughout the country. A total of 100 Community Development Entities (CDEs) were awarded tax credit allocations. They were made through the calendar year (CY) 2020 round of the New Markets Tax Credit Program (NMTC Program).
“These investments will create jobs and spur economic growth in urban and rural communities across the country,” Treasury Secretary Janet Yellen said. “Many of the communities that will receive these funds have confronted economic challenges over many decades. Challenges which have been made more difficult by a lack of investment. It’s critical that Congress sustain these investments over time by making the New Markets Tax Credit Program permanent.”
Officials said the NMTC Program enables individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes when making equity investments in CDEs.
“For over 20 years, the New Markets Tax Credit has facilitated essential investments into low-income communities and businesses, helping them to rebuild after years of disinvestment and enabling them to recover from external forces, such as the current pandemic, which have caused disproportionate harm to the businesses and families in these communities,” CDFI Fund Director Jodie Harris said.