New Markets Tax Credits (NMTC)
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+.
Check an Address — Free Snapshot
See whether a specific Chicago address sits inside the area that unlocks New Markets Tax Credits (NMTC), alongside every other incentive that touches that parcel.
Investors who make Qualified Equity Investments (QEIs) through certified CDEs in eligible census tracts. Business owners can attract NMTC-backed financing for large projects ($5M+).
New Markets Tax Credits (NMTC) is tied to the NMTC Eligible Census Tract 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 · 39% tax credit over 7 years (program made permanent by OBBBA 2025 at $5B/year)
- +39% federal income tax credit claimed over 7 years (5% years 1-3, 6% years 4-7)
- +Below-market-rate financing for qualified projects
- +Can be combined with other tax credits (historic, OZ)
- +Covers real estate, equipment, and business operations
- 1Connect with a certified Community Development Entity (CDE)
- 2CDE applies for NMTC allocation from the CDFI Fund
- 3Business submits project details to the CDE for underwriting
- 4CDE structures the investment and deploys NMTC capital
Contact a local CDE like CNI at (773) 840-2605
- Detailed project plan and business financials
- Proof that project is in an eligible census tract
- Community impact analysis
- Legal and financial structuring documents
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.
- CDE allocation agreement — CDFI Fund
- Phone
- (202) 653-0421
- Web
- Visit site ↗
Last verified 2026-07-02
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.
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.
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.