The Treasury Department has approved Governor Malloy’s Opportunity Zone Program, an effort to spur economic development in areas of high need around the state.
The program provides a federal tax incentive for investors to reinvest in qualified census tracts nominated by the governor. In order to be approved, the designated zone must have a poverty rate of at least 20 percent of a median income that does not exceed 80 percent of the area median income.
The program encourages investors to pool their resources into these designated areas, increasing the scale of investments going to underserved areas. In exchange, investors are able to decrease their federal tax burden through the preferential treatment of capital gains.
Multiple zones are designated in Bridgeport, Hartford, New London, New Haven, Stamford and Waterbury, among other communities. In all, 72 zones have been approved in 27 municipalities across the state.