Treasury, IRS Issue COVID-19 Pandemic Relief for CDEs, QALICBs with Time-Sensitive NMTC Acts

Friday, June 12, 2020 - 11:00am

The Treasury Department and Internal Revenue Service (IRS) today issued a notice providing tax relief for new markets tax credit (NMTC) transactions affected by the COVID-19 pandemic. IRS Notice 2020-49 provides extensions for community development entities (CDEs) and qualified active low-income community businesses (QALICBs) for certain time-sensitive acts due to be performed between April 1, 2020, and Dec. 31, 2020. The acts include when a CDE is due to invest cash received from a qualified equity investment (QEI) in a qualified low-income community investment (QLICI), when a CDE is due to reinvest cash or a payment in a QLICI and a when a QALICB is due to expend the proceeds of a capital or equity investment or loan by a CDE for the construction of real property. If those acts were previously due between April 1 and Dec. 31, they are now considered to meet NMTC requirements if done by Dec. 31. The issues were addressed in an April letter from the NMTC Working Group to the IRS.

This notice and other implications of the COVID-19 pandemic on the NMTC community will be discussed in the June 16 episode of the Novogradac Tax Credit Tuesday Podcast and at the Novogradac 2020 New Markets Tax Credit Virtual Conference, July 23.

For community development, affordable housing and renewable energy updates related to COVID-19, see Novogradac’s dedicated page.