New Market Tax Credits

Benefits

The NMTC Program incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities. As of the end of FY 2016, the NMTC Program has:

  • Generated $8 of private investment for every $1 of federal funding
  • Created 178 million square feet of manufacturing, office, and retail space
  • Financed over 5,400 businesses

Download NMTC Program Fact Sheet (English) ›
Download NMTC Program Fact Sheet (Español) ›
View QEI Issuance Report (July 2020) ›

Whitewater New Market Tax Credit Map (PDF)


OVERVIEW

Historically, low-income communities experience a lack of investment, as evidenced by vacant commercial properties, outdated manufacturing facilities, and inadequate access to education and healthcare service providers. The New Market Tax Credit Program (NMTC Program) aims to break this cycle of disinvestment by attracting the private investment necessary to reinvigorate struggling local economies.

The NMTC Program attracts private capital into low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDEs). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years.

For more information, please see our NMTC Program Fact Sheet (English / Español). A detailed overview of the NMTC Program, including information on eligible activities, can also be found in the Introduction to the NMTC Program presentation.

IRS Materials and Reference Documents


ELIGIBILITY

NMTC Program applicants must be certified as CDEs by the CDFI Fund. For more information on CDE Certification, please see our CDE Certification page

CDE Certification is intended for community development financing intermediaries. Businesses seeking NMTC-enhanced financing should not apply for CDE Certification, but should instead contact CDEs directly. To locate a CDE serving your area, please visit our NMTC Awardee States Served map.

Download our Notice of Allocation Availability for information on eligibility.

HOW TO APPLY

    • Opportunity Zones in Wisconsin from WHEDA

      Locate in Wisconsin Tool

      The Locate in Wisconsin tool is sponsored by Wisconsin Economic Development Corporation (WEDC). It is an online platform that allows you to search properties and businesses in communities across the state, including those with Opportunity Zones.

      Click here to learn more about projects in opportunity zones sites 

      How Do Opportunity Zones Work?

      Three Primary Investor Benefits

      Opportunity Zones offer investors the following incentives for putting their capital to work in low-income communities:

      How OZs Work
      A Temporary Deferral
      A temporary tax deferral for capital gains reinvested in an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is sold or December 31, 2026.
      A Step-Up In Basis
      A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis of the original investment is increased by 10% if the investment in the qualified opportunity zone fund is held by the taxpayer for at least 5 years, and by an additional 5% if held for at least 7 years, excluding up to 15% of the original gain from taxation.
      A Permanent Exclusion From Taxable Income Of Capital Gains
      A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in a qualified opportunity zone fund, if the investment is held for at least 10 years. (Note: this exclusion applies to the gains accrued from an investment in an Opportunity Fund, not the original gains).
       

      Opportunity Zone Funds

      OZ Flow

      Qualified Opportunity Funds (QOF) are new private sector investment vehicles that invest at least 90 percent of their capital in qualifying assets in Opportunity Zones. U.S. investors currently hold trillions of dollars in unrealized capital gains  in stocks and mutual funds alone— a significant untapped resource for economic development. Funds will enable a broad array of investors to pool their resources in Opportunity Zones, increasing the scale of investments going to underserved areas.

       Investment types

      Qualified Opportunity Funds can be invested in a variety of investment types, including:

      How OZs Work 

      OZ Timeline

      Although the first deadline for the Opportunity Zones Initiative occurs at the end of this year, December 31, 2019, investors are still able to take advantage of other Initiative incentives.

      OZ Timeline

      Source: Economic Innovation Group

       

      How Communities Can Engage

      Local leaders and stakeholders play a crucial role in guiding Opportunity Zone investments in their communities. Often, an Opportunity Zone strategy can be melded into a community’s existing long range planning and development goals. WHEDA frequently presents at summits, workshops, and conferences across the state on how communities can leverage the Opportunity Zone Initiative.

      View WHEDA’s Presentation  The Governance Project Municipal Toolkit  LISC Opportunity Zone Playbook 

      • PHASE 1

        START WITH A VISION

      • PHASE 2

        IDENTIFY ZONE-SPECIFIC NEEDS

      • PHASE 3

        CATALOG COMMUNITY RESOURCE

      • PHASE 4

        MAP LOCAL STAKEHOLDER ECOSYSTEM

      • PHASE 5

        SELECT PRIORITY PROJECTS

      • PHASE 6

        DEVELOP FINANCING TOOLS TO REFINE PRIORITIES

      • PHASE 7

        PROGRESS PRIORITY PROJECTS INTO DEALS

      Other Resources