New Markets Tax Credit (NMTC) is a non-refundable tax credit intended to
encourage private capital investment in eligible, impoverished, low-income
communities. NMTCs are allocated by the Community Development Financial
Institutions Fund (CDFI), a bureau within the United States Department of
the Treasury, under a competitive application process. Investors who make
qualified equity investments reduce their federal income tax liability by
claiming the credit. The NMTC program, enacted in 2000, is currently
authorized to allocate $33 billion through the end of 2011. To date, the
CDFI has exhausted 664 awards totaling $33 billion in NMTC allocation
authority. In spite of this, demand for allocations remains strong. For the
2012 NMTC round, requests of nearly $22 billion were made, though any
awards are subject to congressional action extending or reauthorizing the
The most recent program extensions were made in the 111th Congress. The
American Recovery and Reinvestment Tax Act of 2009, P.L. 111-5, increased
the NMTC allocation for 2008 and 2009 to $5 billion from $3.5 billion.
Further, the Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 (P.L. 111-312) extended the NMTC authorization through
2011 at $3.5 billion per year.
In the 112th Congress H.R. 2655 and H.R. 3224 would both extend the NMTC
through 2016 with allocation authority of $5 billion and $10 billion,
respectively, while S. 3521 would extend the NMTC for two years with
allocation authority of $3.5 billion per year.
Date of Report: December 20, 2012
Number of Pages: 11 Order Number: RL34402 Price: $29.95
For email and phone orders, provide a Visa, MasterCard, American Express, or Discover card
number, expiration date, and name on the card. Indicate whether you want e-mail
or postal delivery. Phone orders are preferred and receive priority processing.