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Financial Institutions Featured Offerings New Markets Tax Credit (NMTC) The New Markets Tax Credit (NMTC) is an incentive designed to spur lending and economic development in low-income communities. The lending terms are more flexible than traditional loans, which is a benefit to many lower net-worth individuals. For equity investors, the incentive to participate in this program is a 39 percent federal tax credit spread over seven years. Helping institutions participate, Crowe Horwath LLP can assist with preparation of a community development entity (CDE) application. Crowe has guided numerous clients in successfully obtaining NMTC grants, and our experience gives you assurance during the application process. In the competitive bidding process, a CDE may receive all the credit allocation requested, some, or none. In addition to providing services to low-income communities, your institution can derive tax benefits by participating in this program. The tax credit goes to equity investors (e.g., a bank investing $1 million). A financial institution is then able to reduce federal tax liability (e.g., 39 percent over seven years, or $390,000 on a $1 million investment). In addition to this federal tax credit, Crowe can advise your organization about a number of other federal, state, and local tax credits and business incentives of benefit to financial institutions.
Under U.S. Treasury rules issued in 2005, we must inform you that any advice in this communication to you was not intended or written to be used, and cannot be used, to avoid any government penalties that may be imposed on a taxpayer. |
