How does the NMTC Program work?
The NMTC Program permits taxpayers to claim a credit against Federal income taxes for Qualified Equity Investments (QEIs) made to acquire stock or a capital interest in designated Community Development Entities (CDEs). These designated CDEs must use substantially all (defined as 85 percent) of these proceeds to make Qualified Low-Income Community Investments (QLICIs). The investor, or a subsequent purchaser, is provided with a tax credit claimed over seven years. The investor receives a tax credit equal to five percent of the total amount paid for the capital interest or stock purchase over the first 3 years. For the final four years, the value of the tax credit is six percent annually. The Community Development Financial Institutions Fund (CDFI Fund) certifies CDEs on an ongoing basis, and allocates NMTC Allocations annually to select CDEs through a competitive application process. Impact Seven is a qualified CDE, and is currently awaiting decision on its pending NMTC Allocation appli
