Bipartisan Group of Senators Introduce Legislation to Create CDFI Tax Credit
A bipartisan group of six senators introduced legislation to create a tax credit for equity-equivalent investments or long-term patient capital available to community development financial institutions (CDFIs). The Community Development Tax Credit Act of 2023 (S. 2963) would create a CDFI tax credit worth 70%, taken as 3% over the first 10 credit allowance dates and 4% over the next 10 credit allowance dates. The applicable percentage would increase by one point for any qualified CDFI investment without a fixed term or duration. Qualified investments would include equity investments, loans with a minimum term of 10 years and equity equivalent investments for CDFI loan funds. CDFIs would be required to apply for allocation through the CDFI Fund and the credit would be capped at $1 billion in 2023, $1.5 billion in 2024 and $2 billion for each year thereafter, adjusted for inflation. Similar legislation was introduced in the previous session of Congress.
Hear more about the CDFI Fund, particularly about new markets tax credits (NMTCs), at the Novogradac 2023 Fall New Markets Tax Credit Conference, Oct. 26-27 in New Orleans.