Are There Any Tax-Free Investments?
Community Development Financial Institutions
Community Development Financial Institutions
The New Markets Tax Credit (NMTC) is another program designed to encourage private investments in low-income and financially distressed communities. These investments are channeled from investors to the communities through Community Development Entities. On Feb. 7, a bipartisan group of U.S. representatives introduced legislation to make the NMTC permanent, index allocations to inflation in future years and exempt these investments from the alternative minimum tax. Without renewal, the credit will expire at the end of the year.
The NMTC is a tax credit of up to 39% of the amount invested that can be claimed against federal taxes and spread over seven years.
By the end of fiscal year 2021, the NMTC had provided $8 in private investment for every $1 invested by the federal government in these low-income communities, with more than 10,800 businesses benefiting from various funding opportunities.
The New Markets Tax Credit (NMTC) is another program designed to encourage private investments in low-income and financially distressed communities. These investments are channeled from investors to the communities through Community Development Entities. On Feb. 7, a bipartisan group of U.S. representatives introduced legislation to make the NMTC permanent, index allocations to inflation in future years and exempt these investments from the alternative minimum tax. Without renewal, the credit will expire at the end of the year.
The NMTC is a tax credit of up to 39% of the amount invested that can be claimed against federal taxes and spread over seven years.
By the end of fiscal year 2021, the NMTC had provided $8 in private investment for every $1 invested by the federal government in these low-income communities, with more than 10,800 businesses benefiting from various funding opportunities.