Federal Opportunity Zones
Created by the 2017 Tax Cuts and Jobs Act and made permanent by the One Big Beautiful Bill Act (OBBBA, Pub. L. 119-21, July 2025) on a 10-year designation cycle. OZ 2.0 governor nominations underway July 2026; new OZ 2.0 map effective 1/1/2027. Existing OZ 1.0 tracts remain valid through 12/31/2028.
Check an Address — Free Snapshot
See whether a specific Chicago address sits inside the area that unlocks Federal Opportunity Zones, alongside every other incentive that touches that parcel.
Investors with capital gains who invest through a Qualified Opportunity Fund (QOF) in businesses or real estate within a designated Opportunity Zone. Business owners can attract OZ investment.
Federal Opportunity Zones is tied to the Opportunity Zone (Federal & State) geography — being inside that boundary is the first eligibility gate. A single address can fall inside several overlapping incentive areas at once.
Boundaries are precise and change over time, so exact eligibility always depends on the specific address. The fastest way to know is to run a free snapshot for the parcel you have in mind.
Typical range · Tax deferral + 0% gains after 10 yrs (OZ 1.0 through 2028; OZ 2.0 eff. 1/1/2027)
- +OZ 1.0 (through 12/31/2028): 0% capital gains tax on new OZ investment profits held 10+ years (still available)
- +OZ 2.0 (effective 1/1/2027): 5-year rolling deferral, 10% basis step-up at 5 years (30% for rural QOFs)
- +Pre-2027 OZ 1.0 investments trigger deferred-gain inclusion on 12/31/2026 unless rolled into OZ 2.0
- +OZ 2.0 caps total exclusion at 30 years post-investment
- 1Invest capital gains into a Qualified Opportunity Fund (QOF) within 180 days
- 2QOF must hold at least 90% of assets in OZ property
- 3File IRS Form 8996 annually (expanded reporting beginning 2027)
- 4Work with a tax advisor familiar with OZ 1.0 vs OZ 2.0 transition
Consult a tax advisor about QOF eligibility under OBBBA
- IRS Form 8949 (capital gains documentation)
- IRS Form 8996 (Qualified Opportunity Fund compliance)
- Investment records and QOF documentation
- Property records within the Opportunity Zone
This page is a starting point, not eligibility, legal, or tax advice. Verify current requirements, deadlines, and boundaries with the administering agency before applying or spending money — program rules and funding change over time.
- Phone
- (800) 829-1040
- Web
- Visit site ↗
Last verified 2026-07-02
WOTC LAPSE NOTICE: The Work Opportunity Tax Credit (WOTC) expired December 31, 2025. As of July 2026 it is in legislative hiatus — no new credits are available for employees starting work on or after January 1, 2026. WOTC has historically been reauthorized retroactively; employers are advised to CONTINUE pre-screening new hires using IRS Form 8850 to preserve potential retroactive eligibility. Credit value: $2,400–$9,600 per qualifying hire.
The New Markets Tax Credit program was made permanent by OBBBA (July 2025) with $5 billion in annual allocation authority — eliminating the prior reauthorization risk. The 39% federal tax credit on qualified equity investments through certified CDEs continues without sunset. CY 2026 application round not yet open as of July 2026. NMTC flows through Community Development Entities (CDEs), not directly to businesses — projects typically $5M+.
HUD-designated Qualified Census Tracts boost Low-Income Housing Tax Credits (LIHTC) by 30%, making affordable housing development more financially viable in these areas.
Properties in National Register Historic Districts qualify for a 20% federal tax credit on certified rehabilitation costs, one of the most valuable credits available for historic building projects.