Have you heard of Opportunity Zones? If not, the term might become more familiar as the country rebounds from the economic shutdown spurred by the pandemic.
The Tax Cuts and Jobs Act, passed in December of 2017, included many tax reforms for all Americans–including the Opportunity Zone tax incentive.
Opportunity Zones are designated economically-distressed areas in the U.S. The zones encourage business investment in areas that need it most. By offering tax incentives to companies to build stores, restaurants and apartments in these areas, new jobs will be created and economic activity will help to breathe fresh air into communities.
The Covid-19 crisis devastated industries and neighborhoods across the U.S.–but we especially saw a negative effect on low-income communities. Businesses located in Opportunity Zones were no exception. In order to assist these businesses, some states instituted grant programs to help designated Opportunity Zones.
For example, in New Jersey, The New Jersey Economic Development Authority (NJEDA) launched a Small Business Emergency Assistance Program. $10 million of second phase funding will go towards businesses located in Opportunity Zones–a necessary lifeline to support these areas.
As the country heals from the pandemic, Opportunity Zone tax incentives will appeal to investors who are looking to expand their business in financially smart ways. For distressed communities that have been left behind and long endured economic hardships, this means more affordable housing, employment opportunities, and small business growth. Opportunity Zones provide revitalization and bring positive economic and social change–something that is long overdue and greatly needed after the impact of the pandemic.