New Markets Tax Credits

New Markets Tax Credits (NMTC) provide incentives for bringing jobs, businesses, and economic growth to distressed communities. The NMTC Program offers growth-oriented investors a cost effective method to enter underserved markets, even though the process — from certification through closing — is complicated. As a nationally renowned NMTC advisor and pioneer, we are the go-to firm for investors, developers, and community oriented organizations. Our experts guide you through the entire lifecycle of your program. We prepare and submit Community Development Entity (CDE) certifications, file CDFI Fund data, conduct annual audits and reporting, address state and local tax issues, and provide transaction advisory and compilation services for qualified businesses in low-income communities.

COMPREHENSIVE SERVICE

CohnReznick provides comprehensive assurance, tax, transactional, and consulting services to investors, CDEs, and end-users of NMTC capital. Involved in the program since its inception, we also serve as NMTC advocates for our clients, before Congress, and in support of industry participants and coalitions.

MAINTAIN COMPLIANCE

As a federal program, the NMTC Program is tightly controlled, and CDEs are faced with numerous regulatory and programmatic rules. Experts in the requirements of the CDFI Fund and the IRS, we can help you maintain full program compliance with your allocation agreement, Internal Revenue Code Section 45D, and in submitting all required documentation to both agencies.

MINIMIZE YOUR NMTC TRANSACTION TAX OBLIGATIONS

We mitigate the impact of various federal and state taxes in your NMTC liquidation transaction. Specifically, we address original issue discount regulations, fee allocations with regard to deductibility timing, the impact of fees on recipients, QEI/investor redemption calculations under the Section 45D Safe Harbor provision, and imputed interest calculations, among other considerations.

SERVING YOUR NMTC PROGRAM NEEDS – FROM CERTIFICATION TO CLOSING

CohnReznick is your partner through the entire life cycle of your participation in the NMTC Program — from your certification as a CDE through the monetization of your credits.

Our full range of NMTC services

Allocation Application consulting

Allocation strategy and investment plan focused on weighting factors impacting scoring of application
Design of flexible loan products — developing underwriting criteria, consulting on loan application process

Audit, financial, and compliance support

Agreed Upon Procedures compliance reports
Annual CDE and NMTC Investment Fund audits
Financial modeling of NMTC transactions
Fund attestation, tax, and compliance
Independent compliance program reviews
Loan and investment structuring
Federal, state, and local tax return preparation

Transactional advisory

Financial structuring and modeling to address loan pools/funds, investor yields, net income/loss pass through, cash flows, dissemination of fees, residual returns and tax impact to beneficiaries and borrowers
Tax planning and compliance
Transaction structuring based on economic/quantitative/programmatic factors

Ongoing training and guidance

In-house compliance program creation with customized onsite training
Community Impact Information System (CIIS) reporting and documentation Documentation for maintenance of CDE status
Semi-annual testing procedures
Investment/QLICI/QALICB due diligence and documentation
Establishing procedures for data collection and filing IRS Form 8874A