The U.S. Department of the Treasury has announced New Markets Tax Credit (NMTC) awards for 2024 and 2025, along with reforms aimed at community revitalization and compliance with federal anti-discrimination laws.
Secretary Scott K.H. Bessent stated, “Under President Trump’s leadership, the One Big Beautiful Bill made the NMTC program permanent. Investors, businesses, and communities now have the long-term certainty they need to plan ahead. With the NMTC program now permanent, it is imperative that these federal incentives are focused on lasting job creation rather than the latest political trends.”
According to Treasury officials, previous efforts by the Biden Administration attempted to use the NMTC program for diversity, equity, inclusion (DEI), and environmental, social, and governance (ESG) initiatives instead of focusing on community revitalization. Starting this year, Treasury’s Community Development Financial Institutions Fund (CDFI Fund) will update NMTC allocation agreements to reinforce permitted uses of credits and ensure adherence to anti-discrimination regulations. The CDFI Fund will also increase its oversight of how awardees utilize credits in accordance with presidential executive orders and relevant laws.
Treasury indicated that in cases where awardees do not comply with requirements, it plans to take action as allowed by law. This may include decertifying noncompliant community development entities, ending unused credits, or reclaiming previously awarded credits.
This year’s NMTC allocations represent a 20 percent increase in investments directed toward rural and non-metro areas. The funding is expected to help expand rural hospitals, support small businesses, boost domestic manufacturing capacity, and create jobs.
Looking ahead, Treasury plans additional reforms for future NMTC cycles to emphasize affordable housing development; small business growth; domestic manufacturing; job-producing projects; and essential health infrastructure in rural communities.
