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.