New Markets Tax Credits
The tool is administered by the U.S Department of Treasury designed to attract capital to projects that support low- and moderate-income households and communities.
Since 2005, Michigan Community Capital has received $320 million in New Markets Tax Credit allocations and has remained the only CDE deploying efforts entirely in Michigan at a state-wide level. These awards were invested in projects such as the Allen Neighborhood Center in Lansing, Sugar Hill in Detroit, Hudsonville Creamery expansion in Holland, Peterson Farms in Hart, and UP Paper in Manistique. To date, MCC has invested NMTC allocations into 28 projects across the state resulting in over 6,500 full-time jobs created or retained, more than 450 housing units established, and the development of 1.3 million square feet of commercial, retail and industrial space.
The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries known as Community Development Entities (CDEs). CDEs that receive the tax credit allocation authority under the program are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities. The tax credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year period. The CDEs in turn use the capital raised to make investments in low-income communities. CDEs must apply annually to the CDFI Fund to compete for New Markets Tax Credit Program allocation authority. Since the inception of the NMTC Program, the CDFI Fund has completed 17 allocation rounds and has made 1,354 awards totaling $66 billion in tax allocation authority.
To learn more about the New Markets Tax Credit Program visit www.cdfifund.gov/nmtc.
Since its creation in 1994, the CDFI Fund has awarded more than $5.1 billion to CDFIs, community development organizations, and financial institutions through: the Bank Enterprise Award Program; the Capital Magnet Fund; the CDFI Rapid Response Program; the Community Development Financial Institutions Program, including the Healthy Food Financing Initiative; the Economic Mobility Corps; the Financial Education and Counseling Pilot Program; and the Native American CDFI Assistance Program. In addition, the CDFI Fund has allocated $66 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, and guaranteed bonds for over $1.7 billion through the CDFI Bond Guarantee Program.
To learn more about the CDFI Fund and its programs, please view the Fact Sheet or visit the CDFI Fund’s website at www.cdfifund.gov.