Final New Markets Tax Credit Regulations Address Targeted Populations

Treasury issued final regulations under the New Markets Tax Credit program, saying that an entity may be eligible to be treated as a qualified active low-income community business serving targeted populations where (i) at least 50% of the entity’s total gross income for any tax year is derived from sales, rentals, services, or other transactions with low-income individuals (generally, income, adjusted for family size, of not more than 80% of area median income); (ii) at least 40% of the entity’s employees are low-income individuals; or (iii) at least 50% of the entity is owned by low-income individuals.  The final regulations are effective December 5, 2011, and they make Notice 2006-60 obsolete for tax years ending after December 4, 2011.