The Illinois New Markets Development Program (NMDP) provides supplemental funding for investment entities that participate in the Federal New Markets Tax Credit (NMTC) program. The total annual allotment of up to $20 million in tax credits helps to finance investments that create jobs and prosperity, revitalizing low-income communities throughout Illinois.
All applicants must be recognized as a Community Development Entity (CDE) as part of the Federal NMTC program. Please see the Department of the Treasury’s NMTC page for more information
. Credits allocated to CDEs are then provided to investors that make qualified equity investments (QEIs) that benefit qualifying active low-income community businesses.
The program provides non-refundable tax credits to investors in qualifying CDEs worth 39% of the equity investment made into the CDE over a 7-year allowance period. Allocations break down as follows:
- 0% for years 1 and 2
- 7% for year 3
- 8% for years 4,5,6 and 7
Please refer to IRC § 45(c)(1). CDEs must demonstrate:
- The primary mission of the entity is serving, or providing investment capital for, low-income communities or low-income persons.
- The entity maintains accountability to residents of low-income communities through their representation on any governing board of the entity or on any advisory board entity, and
- The entity has entered into, or is controlled by an entity that has entered into, an allocation agreement with the federal New Markets Tax Credit program.
Generally, any business that derives or projects to derive 15 percent or more of its annual revenue from rental or sale of real estate is not a qualified active low-income community business, unless it falls into an exception in the Illinois NMDP Act.
How to Apply
The 2015 New Markets Development Program Application is now available.
DCEO will begin accepting applications for tax credit allocations beginning February 4, 2015. Qualified CDEs may
complete the application below and mail or deliver it to:
New Markets Development Program
Illinois Department of Commerce and Economic Opportunity
100 W. Randolph St. Suite 3-400
Chicago, IL 60601
DCEO has the authority to allocate credits for up to $125 million in QEI, with the corresponding credits being worth up to $10 million annually in years 4-7 of the credit. For more information on application procedures, please read the Program Guidelines document on this page.
More information on the Illinois New Markets Development Program