Illinois New Markets Development Program

IMPORTANT APPLICATION UPDATES

  

Program Updates and 2019 Allocation

The New Markets Development Program was extended and revised by Public Act 100-0408, effective August 25, 2017. The legislation created allocation rounds in 2019 and 2020 for $125,000,000 of QEI each year ($48,750,000 in tax credits). The Department will begin accepting applications for the 2019 allocation on January 2, 2019. Based on prior allocation rounds, it is likely that demand will be high, and all credits will be allocated to CDEs that submit their complete applications on January 2, 2019. Applications with missing information will be deemed incomplete and be treated as having been submitted on the date on which the missing information is provided to the Department. 

To view all changes to the New Markets Development Program go to Public Act 100-0408.

 

Delays in issuance of the federal New Markets Tax Credit allocations

Delays in issuance of the federal New Markets Tax Credit allocations for the application period that was announced May 11, 2018 and barriers to accessing the CDFI Fund's Awards Management Information System (AMIS) have prompted questions about completing the Department's application for the state allocation round that begins January 2, 2019. Please review the following when completing your application.

Box 15, Item 2:

Attach the most recently available screen shot showing your remaining federal qualified equity investment authority, even if zero, the amount applied for in the most recent federal application round, and the portion of the federal application showing the amount requested that may be deployed in Illinois. Allocation requests that incorporate anticipated federal allocations will have until the end of the 30-day deadline set forth in 20 ILCS 663/25(f) to receive notice of a federal allocation that corresponds to the amount requested in the Department's application. If the applicant does not possess sufficient allocation by that date, the entire preliminary certification shall lapse.

If the most recently available AMIS screen shot is not reflective of the applicant's remaining federal qualified equity investment authority, please attach an affidavit stating signed by the executive officer identified in Box 25 attesting to the remaining amount. The Department may require an updated screen shot if access to AMIS is restored in January.

Box 19:

The number in this box should correspond to the amounts supported by the documentation provided in response to Box 15, Item 2, and the amount entered in Box 18.

 

Eligible Applicants

All applicants must be recognized as a Community Development Entity (CDE) as part of the Federal NMTC program.  Credits allocated to CDEs are then provided to investors that make qualified equity investments (QEIs) that benefit qualifying active low-income community businesses.

CDE Certification
https://www.cdfifund.gov/programs-training/certification/cde/Pages/default.aspx

Federal New Markets Tax Credit Program (NMTC)
https://www.cdfifund.gov/programs-training/Programs/new-markets-tax-credit/Pages/default.aspx

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.

 

Allocation Structure

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

 

Current Program Participants

All current program participants must submit an annual report to verify investments to receive the tax credit, which can be found below. Please email the report to ceo.newmarkets@illinois.gov.

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 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.

 

Additional Resources and Program Information

List of 2015 Certifications
Illinois New Markets Development Program Guidelines
Illinois New Markets Development Program Statute
NMDP Allocations 2009 thru 2015
Federal NMTC Awards by State
2015 Final Certification List

NMTC Annual Report February 7 2019

Please direct all Illinois New Market Development Program Inquiries to NewMarkets@illinois.gov.