A portion of Montclair, located roughly along the eastern half of the Bloomfield Avenue corridor, is eligible to participate in the New Market Tax Credit (NMTC) program. The NMTC Program was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities. The NMTC Program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their Federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years (five percent for each of the first three years, and six percent for each of the remaining four years).
The investment in the CDE cannot be redeemed before the end of the seven-year period.
Since the NMTC Program’s inception, the CDFI Fund has made 594 awards allocating a total of $29.5 billion in tax credit authority to CDEs through a competitive application process. This $29.5 billion includes $3 billion in Recovery Act Awards and $1 billion of special allocation authority to be used for the recovery and redevelopment of the Gulf Opportunity Zone.
An organization wishing to receive awards under the NMTC Program must be certified as a CDE by the Fund. To qualify as a CDE, an organization must:
- be a domestic corporation or partnership at the time of the certification application;
- demonstrate a primary a mission of serving, or providing investment capital for, low-income communities or low-income persons; and
- maintain accountability to residents of low-income communities through representation on a governing board of or advisory board to the entity.
For more detailed information on the CDE certification process and CDE certification Application materials, please visit the New Markets Tax Credit Program webpage.