An IRS Form 8874, New Markets Credit, is used by Community Development Entities (CDEs) to provide notice to taxpayers who invest in the CDE, entitling them to the new markets credit. It must be filed with the Department of the Treasury Internal Revenue Service Center no later than 60 days after the investment is made.
What is Form 8874-A?
Form 8874-A is used to provide notice to any taxpayer who acquires a qualified equity investment in the CDE at its original issue, as required under Regulations section 1.45D-1(g)(2)(i)(A). The original signed form must be provided by the CDE to the taxpayer no later than 60 days after the taxpayer makes the investment in the CDE, with copies to be sent to the IRS and kept for recordkeeping. The Paperwork Reduction Act requires the form to display a valid OMB control number; other details about this form can be found in sections 45D and 1.45D-1 of Form 8874 and the CDFI website.
IRS Form 8874-A – Who Needs to Fill It Out?
IRS Form 8874-A, the New Markets Credit form, is a form filed by Certified Development Entities (CDEs) who are required to provide notice to a taxpayer for any qualified equity investments they make. Forms must be provided by the CDE to the taxpayer within 60 days of when the investment was made and a copy should be sent to the IRS at the address which is listed on the form. More information and details about the form can be found in the instructions, declaration documents, and at www.cdfifund.gov. Paperwork Reduction Act information is also available, and the estimated time for recordkeeping is 4 hours and 32 minutes. The form is subject to IRS confidentiality laws (section 6103) and feedback or suggestions regarding the form or its instructions can be submitted to [email protected].
Step-by-Step: Form 8874-A Instructions For Filling Out the Document
Section references are to the Internal Revenue Code unless otherwise noted. The purpose of Form 8874-A is for Community Development Entities (CDEs) to provide notice to any taxpayer who acquires a qualified equity investment in the CDE at its original issue that the equity investment is a qualified equity investment entitling the taxpayer to claim the new markets credit. The original signed form must be provided to the taxpayer no later than 60 days after the investment is made and a copy sent to the IRS and kept for your records. Each qualified equity investment must be accompanied by a separate form. Additional information can be found in Form 8874, New Markets Credit, section 45D, and Regulations section 1.45D-1 as well as www.cdfifund.gov. The estimated average time to complete and file this form is 4 hr., 32 min. for recordkeeping, 24 min. for learning about the law or the form, and 28 min. for preparing and sending the form to the IRS.
Below, we present a table that will help you understand how to fill out Form 8874-A.
| Information Required for Form 8874-A | Details |
|---|---|
| Notice to Taxpayer | Provide notice to the taxpayer who acquires a qualified equity investment |
| Original Signed Form | Provide to the taxpayer within 60 days after the investment |
| Additional Information | Refer to Form 8874, New Markets Credit, section 45D, and Regulations section 1.45D-1 |
| More Details | Visit www.cdfifund.gov for additional information |
Do You Need to File Form 8874-A Each Year?
No, Form 8874-A only needs to be filed at the time of the initial qualified equity investment in the CDE. The original signed form must be provided by the CDE to the taxpayer no later than 60 days after the date the taxpayer makes the investment. A copy should also be sent to the IRS at the address listed and a copy kept for your records. For more details, see Form 8874, New Markets Credit, section 45D, Regulations section 1.45D-1, and www.cdfifund.gov.
Download the official IRS Form 8874-A PDF
On the official IRS website, you will find a link to download Form 8874-A. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 8874-A
