Menu
816.298.8428
www.marksnelsoncpa.com
Bridging
COMPLIANCE + PLANNING
smart-tech

NEW MARKET TAX CREDITS

New Market Tax Credits Still Viable Option for Some Communities

Funding for investments in distressed communities received a boost 18 years ago when Congress enacted the New Markets Tax Credit (NMTC) program in late 2000. The program as received several extensions, most recently with the 2017 tax reform bill. Several states have added a state NMTC program.

Tax incentives are provided in the form of tax credits to investors who invest in the promotion economic improvements to disadvantaged communities through special purpose entities called CDE’s (Qualified Community Development Entities). The CDE applies for an annual federal award of NMTC through a competitive process and lengthy application through the US Treasury’s CDFI Fund. CDE’s seek out investors for their annual fund and then must invest substantially all of the funds (Qualified low-income community investments – QLICI) into the distressed community business (Qualified active low-income business – QALICB). The CDE uses its local knowledge and expertise to select which business to invest in, either through a loan or equity.

The taxpayer/investor receives a 39% credit over years seven years – 5% each of the first three years and 6% for the next four years. The legal structure of these investment activities is complex so experienced attorneys and accountants are needed to complete the documents and flow of funding.

Business investments that qualify for the program bring jobs to the disadvantaged community and could include small technology firms, shopping centers, manufacturers, retail stores, hotels, etc. Residential rental properties are excluded from the list of qualified businesses as well as “sin” businesses. Non-residential historic buildings using historic tax credits in distressed communities pair well with the NMTC.

C_Users_galli_AppData_Local_Packages_Microsoft.SkypeApp_kzf8qxf38zg5c_LocalState_49d9a3a7-db6e-4aa4-a5fc-eb80a0a08708-min
mn1

WHITEPAPER

5 STEPS TO BUILDING YOUR SMART TECHNOLOGY ROADMAP

WHAT IS A TECH ASSESSMENT
1
WHY YOU NEED ONE
2
WHEN YOU NEED ONE
3
HOW TO CONDUCT A TECHNOLOGY AUDIT
4
MEASURING THE RESULTS
(KPI, ROI, DATA & ANALYTICS)
5

STAY CONNECTED WITH
SMART TAX

Smart Tax Services

Menu

OUR PEOPLE

Employees

RELATED SERVICES

INSIGHTS

post-image

TAX SERVICES MADE SIMPLE

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.
post-image

LITIGATION SUPPORT

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.
law

SUCCESSION PLANNING

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.
tech

TECHNOLOGY SOLUTIONS

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.