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New Markets Tax Credits

New Markets Tax Credits. Authorized by the U.S. Treasury – CDFI A Community Development Entity (CDE), certified by CDFI, receives and administers tax credits; Tax credits are incentives to investors to take the credits to offset federal income taxes on their return on investment;

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New Markets Tax Credits

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  1. New Markets Tax Credits • Authorized by the U.S. Treasury – CDFI • ACommunity Development Entity (CDE), certified by CDFI, receives and administers tax credits; • Tax credits are incentives to investors to take the credits to offset federal income taxes on their return on investment; • A business entity secures a loan from the CDE for a proposed development Qualified-Equity Investment (QEI); • The Business entity applies to the CDE and CDE packages application responding to Notice of Allocation Availability (NOAA);

  2. The CDE secures cash to lend to the Business Entity to develop the project. • The Mortgage is tied to the land • Business Site Leases on trust lands must provide for an encumbrance to expedite the loan. • Development takes place • the investors (syndication) will require audits of the facilities & operation; • to insure that their investment is properly managed and safe over the 7 year period (5556666=>39%).

  3. New Markets Tax Credits Investors Grants Mechanism through which New Markets Tax Credits are secured at 39% over 7 years. Investors get a tax break on returns per year (5556666) Own CDE Total Project Budget

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