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
In his national practice, Mr. Kolodner represents sponsors, lenders, and investors in community development projects using tax credit financing. Bringing more than 20 years of experience, he focuses on complex deal structuring in a variety of transactions that combine tax incentives—notably New Markets Tax Credits (NMTC), Historic Tax Credits (HTC), Low-Income Housing Tax Credits (LIHTC), and Renewable Energy Tax Credits—with state tax credits that mirror them, as well as other financing sources. Mr. Kolodner’s clients include large and small developers in both the for-profit and nonprofit sectors, Qualified Active Low-Income Community Businesses (QALICBs), Community Development Entities (CDEs), institutional tax credit investors, community lenders, and regional banks. Mr. Kolodner collaborates with clients to complete transactions that provide affordable housing, save and restore historic buildings, and create highly valued neighborhood facilities. He serves on the board of Preservation Massachusetts, participates in the tax credit coalitions for both HTC and NMTC, and lobbies for tax credits on national and state levels and regularly speaks at local and national conferences on tax incentives and complex deal structuring.
Mr. Smith is a Shareholder in Maynard Nexsen’s Public Finance Group. He has over twenty-five years of experience and focuses on tax-advantaged finance and securities transactions and on infrastructure transactions. Mr. Smith advises government, nonprofit, and for-profit organizations on taxable and tax-exempt financings, serving as bond counsel, disclosure counsel, issuer’s counsel, and underwriter’s counsel. He also advises clients on related matters, including financing restructurings, interest rate swaps, and tender offers. Finally, Mr. Smith assists clients in navigating post-issuance tax and securities issues, such as determining permitted uses of bond proceeds, arbitrage and rebate compliance, and continuing disclosure.
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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?
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