The New Markets Development Program Tax Credit was created to encourage taxpayer investment in low-income communities via a nonrefundable credit against the taxes imposed by KRS141.020, 141.040, 141.0401, 136.320, 136.330, 136.340, 136.350, 136.370, 136.390, or 304.3-270. The qualified community development entity must first submit an application to the DOR and once approved, the qualified community development entity may issue a long-term debt security or receive an equity investment that will result in eligible credit. The person or entity actually making the loan or making the equity investment will be able to claim a credit, subject to a ten million ($10,000,000) credit cap each fiscal year, by completing Form 8874(K)-A.
Eligible Recipients:
Non-Profit Organization; For-Profit Business
Eligible Recipients Detail:
Investors that invest in securities from a qualified community development entity (CDE) are eligible for tax credits. The CDE must apply prior to issuing long-term debt or receiving an equity investment that qualifies the investor for a tax credit.
Eligible Purpose:
Building Infrastructure; Last Mile Infrastructure
Eligible Purpose Detail:
The qualified community development entity must invest at least eighty five percent (85%) of the funds received via a qualified equity investment in qualified active low-income community businesses located in the Commonwealth of Kentucky within 24 months after the issuance of the investment for years prior to 2014. For years beginning in 2014 the qualified community development entity must invest 100 percent of the funds received via a qualified equity investment in qualified active low-income community businesses located in the Commonwealth of Kentucky within 12 months after the issuance of the investment.
