New Markets Tax Credit (NMTC)
A credit for investments in Community Development Entities that serve low-income communities and stimulate economic growth.
Estimate Your Savings
This is a simplified estimate. Actual savings depend on your complete tax situation.
Eligibility
Investors in Community Development Financial Institutions
Requirements
- 1Must invest through a qualified CDE
- 2Investment must serve low-income communities
- 3Credit claimed over 7 years
Required Tax Forms
Understanding the New Markets Tax Credit (NMTC)
A credit for investments in Community Development Entities that serve low-income communities and stimulate economic growth.
Tax credits directly reduce the amount of tax you owe, making them more valuable than deductions which only reduce taxable income. On average, taxpayers save approximately $200,000 with this credit.
To claim this credit, you will need to file Form 8874 and Form 3800 with your annual tax return. Make sure you meet all eligibility requirements and keep documentation of qualifying expenses or activities.
Calculate Your Full Tax Picture
Use our free tax calculators to estimate your total tax liability and savings.
Browse Credits by Category
Frequently Asked Questions
What is the New Markets Tax Credit (NMTC)?
A credit for investments in Community Development Entities that serve low-income communities and stimulate economic growth.
How much is the New Markets Tax Credit (NMTC) worth?
The average savings from the New Markets Tax Credit (NMTC) is approximately $200,000 per year, depending on your specific situation.
Who is eligible for the New Markets Tax Credit (NMTC)?
Investors in Community Development Financial Institutions. Key requirements include: Must invest through a qualified CDE; Investment must serve low-income communities; Credit claimed over 7 years.
What forms do I need to claim the New Markets Tax Credit (NMTC)?
You will need to file Form 8874, Form 3800 with your tax return to claim this credit.
Is the New Markets Tax Credit (NMTC) refundable?
Check the IRS form instructions for this specific credit. Most non-family, non-education tax credits are nonrefundable but may be carried forward.
Can I claim the New Markets Tax Credit (NMTC) with other tax credits?
Yes, in most cases you can claim the New Markets Tax Credit (NMTC) along with other eligible tax credits. However, some credits have interactions that may reduce the benefit. Consult a tax professional for your specific situation.
Related Calculators
Small Business Health Care Credit
Avg $8,000 savings
Work Opportunity Tax Credit (WOTC)
Up to $9,600
Disabled Access Credit
Up to $5,000
Employer-Provided Childcare Credit
Up to $150,000
Tax Refund Estimator
See if you'll get a refund
Income Tax Calculator
Full federal tax estimate
Tax Bracket Calculator
Find your marginal bracket