New Markets Job Growth Investment Act Tax Credit
Changes to the New Markets Job Growth Investment Act (NMTC Act) (LB 682 – Operative May 25, 2021)
The LB 682 changes all relate to the allocation awards issued by the Community Development Financial Institutions Fund (CDFI Fund) in 2021. With regard to the 2021 awards, the following provisions apply.
The definition of qualified equity investment (QEI) was amended. The issuer of a QEI must use 100% of the cash purchase price to make qualified active low-income community investments (QLICIs). The Nebraska QEIs must be designated by the issuer as a QEI under section 45D of the IRC (federal QEI).
- DOR will begin accepting applications for certification of proposed QEIs from 30 to 45 days after the CDFI Fund announces allocation awards in 2021. The application must include a screen shot from the CDFI Fund’s Allocation Tracking System that shows the applicant’s remaining federal QEI authority. The applicant must agree to designate the certified QEIs as a federal QEI.
- DOR may certify proposed QEIs equaling up to $15 million of credits in any year. DOR will prorate the requested QEIs if the total requested by all applicants exceeds $15 million.
- The applicant must issue the Nebraska QEIs and designate them as federal QEIs within 30 days after DOR’s certification or the certification will lapse.
- Qualified active low-income community investment (QLICI) will be considered maintained if investments returned are reinvested in a QLICI by the end of the following calendar year.
- Community development entities that received a Nebraska certification must issue an annual report to the Tax Commissioner. The report is due on or before the last day of February of each year from 2023 to 2028.
The Tax Commissioner must submit an annual report to the Legislature on or before April 1 of each year from 2022 through 2028.
General Information (prior to passage of LB 682 for allocation with fiscal years ended 06/30/2013, 06/30/2014, 06/30/2015, and 06/30/2018)
Revenue Tax Specialist