Congress, subsequently, has increased the total allocation authority to $61 billion and extended the program through 2019. Qualified investment groups apply to the U.S. Department of the Treasury's Community Development Financial Institutions Fund (CDFI) for an allocation of the New Markets Tax Credit. The 114 th Congress extended the NMTC program authorization with the Protecting Americans from Tax Hikes (PATH) Act (Division Q of P.L. For example, in the most recent completed allocation round (2014) nearly 29% of applicants received allocations. Additionally, allocation authority of $19.9 billion was requested, compared with the $3.5 billion in allocation authority available. Column 2 of Table 1 lists the total allocation awarded to date by the NMTC, by funding round. 114-113 ) extended the NMTC authorization through 2019 at $3.5 billion per year. The NMTC is primarily intended to encourage private capital investment in eligible low-income communities.
The New Markets Tax Credit (NMTC) is a non-refundable tax credit intended to encourage private capital investment in eligible, impoverished, low-income communities. NMTCs are allocated by the Community Development Financial Institutions Fund (CDFI), a bureau within the United States Department of the Treasury, 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 $61 billion through the end of 2019. To date, the CDFI has made 912 awards totaling $43.5 billion in NMTC allocation authority. Demand for NMTC allocations has exceeded total allocations each award round—with the 2014 allocation round awarding $3.5 billion in allocation authority from applications requesting approximately $19.9 billion in NMTCs.
The most recent program extension was made in the 114th Congress. The Protecting Americans from Tax Hikes (PATH) Act (Division Q of P.L. 114-113) extended the NMTC authorization through 2019 at $3.5 billion per year.
This report will be updated as warranted by legislative changes.