What is the New Markets Tax Credit (NMTC) Program?
The NMTC Program was created as part of the Community Renewal Tax Relief Act of 2000 to offer investors a federal tax credit for making a Qualified Equity Investment (QEI) in designated Community Development Entities (CDEs) who in turn will make Qualified Low Income Community Investments (QLICIs) such as loans and capital investments in businesses in underserved areas. By making an equity investment in a CDE the investor can receive a tax credit worth 39 percent of the initial investment, distributed over seven years.
