(570) 284.4296 info@driveindustry.com

Pennsylvania’s Opportunity Zones, designated under the federal Tax Cut and Jobs Act of 2017, were recently approved by the Secretary of the U.S. Treasury and the Internal Revenue Service. The Opportunity Zones are a new community development program to encourage long-term investments in low-income urban and rural communities nationwide, offering tax incentives for investors to put their unrealized capital gains into a fund that is dedicated for investing, with a 10-year commitment, in the designated Opportunity Zones.

 

Each governor was given the opportunity to designate up to 25 percent of eligible low-income census tracts, with Pennsylvania selecting 300 tracts based on economic data, recommendations from local partners and the likelihood of private sector investment. Recommendations were made primarily based on the potential to eliminate poverty (about 40 percent of the commonwealth’s Zones have a poverty rate above 35 percent), as well as areas with business activity. They are spread across the state, allowing for a diverse range of economic growth and development throughout the commonwealth.

 

More information about Pennsylvania’s Opportunity Zones can be found at dced.pa.gov. The IRS continues to develop guidance for the certification of investment funds that will be qualified to participate and eligible investments, expected to be available in the fall. In the meantime, a series of FAQs is available at www.irs.gov by searching “Opportunity Zones.”