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Summary:
The New Markets Tax Credit (NMTC) is a non-refundable tax credit intended to encourage private capital investment in eligible low-income communities. NMTCs are allocated by the Community Development Financial Institutions Fund (CDFI) 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 $18.5 billion through the end of 2008. To date, $12.1 billion in NMTCs has been allocated. In the 110th Congress, legislative attention has focused on extending the NMTC program authorization past its currently scheduled 2008 expiration. H.R. 2075 and S. 1239 propose to extend the NMTC through 2013. Both bills propose an additional allocation authority of $3.5 billion per year through 2013, indexed for inflation. This report will be updated as warranted by legislative changes.
