About the Course
Introduction
This CLE webinar will provide an update and overview of New Market Tax Credits (NMTCs) and the impact of the One Big Beautiful Bill Act (OBBBA) on this tax program. The panel will review the most recent IRS regulations and guidance on the NMTC program and discuss best practices for structuring NMTC deals, pairing with historic tax credits (HTCs) and qualified opportunity zones (QOZs), and allocating cancellation-of-debt (COD) income among partners.
Description
OBBBA, which was signed into law by President Trump on July 4, 2025, permanently extends the NMTC program, which was set to expire at the end of 2025. Extending the NMTC program allows the Community Development Financial Institutions Fund (CDFI) to continue allocating $5 billion in NMTC awards annually to support projects in low-income communities nationwide. OBBBA also permits a five-year carry-forward for any NMTCs that are not allocated by the CDFI in a given year.
The NMTC program provides significant opportunities for investors in economic development projects to secure additional financing to complete projects in low-income areas. NMTCs can offer a critical source of financing for a variety of qualified equity investments (QEIs), including mixed-use affordable housing, charter schools, historic preservation projects, manufacturing, food and beverage processing, federally qualified health centers, and renewable energy projects.
These tax credits are subject to recapture during the seven-year credit period if a QEI fails to satisfy specific investment and qualified business requirements. Counsel must understand the recapture triggers, the impact of the IRS safe harbor for HTCs and current regulations relating to "qualified active low-income community businesses" and "qualified low-income community investments," true debt issues, lease vs. ownership issues, the economic substance doctrine, and cancellation of indebtedness planning when negotiating new transactions, evaluating existing deals, or pairing NMTCs with other tax credit and tax deferral programs.
Listen as our authoritative panel discusses best practices for structuring NMTC deals, pairing them with other programs like HTCs, QOZs, coordinating tax-exempt bond financing with USDA/SBA lending, and allocating COD income among partners. The panel will also discuss trends in the NMTC program, IRS regulations and guidance, and other developments under the Trump administration.
Presented By
Bio for Annie Attorney; loves horses and arguments
This is a bio for Big Boat. Big Boat is an avid reader and unicyclist.
This is a bio for speaker, Roller Coaster. Roller Coaster enjoys walks on the beach and pizza with pineapple.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Wednesday, October 29, 2025
- schedule
1:00 p.m. ET./10:00 a.m. PT
I. Overview: NMTCs and OBBBA's permanent extension of the program; double-round in 2025 - 10 billion available rather than $5 billion and the issues and challenges this presents
II. Structuring an NMTC deal
III. Qualification issues/deal readiness/tax opinion issues
IV. Pairing NMTCs with HTCs, QOZs, tax-exempt bond financing, and other tax benefits, including the historic tax credit safe harbor
V. Allocation of costs in an unwind
VI. Drafting operating agreements to cover the allocation of COD income among partners
VII. Restructurings/workouts during the seven-year compliance period; recapture risk
VIII. IRS regulations and guidance
IX. NMTC exit strategies
X. Practitioner pointers and key takeaways
The panel will review these and other key issues:
- What is the effect of OBBBA's permanent extension of the NMTC program?
- What are best practices for structuring NMTC deals to ensure compliance with IRS program requirements?
- What is the potential impact on the use of NMTCs with the IRS safe harbor for partnerships claiming rehabilitation tax credits?
- How are NMTC deals impacted by cancellation of indebtedness?
