New Market Tax Credits

Description
The City of Ypsilanti, as a member of the Wayne County-Detroit Community Development Entity (CDE), is eligible for this incentive. Taxpayers may receive credit against federal income tax for making qualified equity investments in a CDE. The credits provide about 10 - 20% equity money to the project proposed, and are to be used over a seven-year credit allowance period.

During the first three years, an investor receives a credit equal to 5% of the total amount paid for the stock or capital interest at the time of purchase. During the final four years, the value of the credit is 6% annually. Projects need to be in poverty areas of at least 20%. The money can be used to clean up blight, for significant job creation projects, and to provide local services (usually for commercial projects). Projects should have an estimated cost at least $2 million.