Community Development Entity Investment Credit Common Questions

1. When can a community development entity (CDE) submit applications to the Wisconsin Department of Revenue?


2. How does a CDE apply?


3. Is there a fee to apply?


4. What information does a CDE need to submit with their application?


5. How soon will the department approve or deny the application?


6. What if the requested equity investment authority by all CDE applicants exceeds $125 million for either rural and metro areas?


7. What if the department does not award the full amount of rural or metro allocations?


8. When may a CDE transfer its authority to issue qualified equity investments in rural or metro areas?


9. When is the CDE required to provide the department with evidence of the cash received for qualified equity investments?


10. For a CDE not domiciled in Wisconsin, when is the CDE required to provide the department with evidence that 50% of the qualified equity investments under sec. 45D of the Internal Revenue Code is designated for use in Wisconsin?


11. How does a CDE notify the department of the names of insurers that made qualified equity investments and their respective credit amounts?


12. Can an insurer transfer their tax credit?


13. If a claimant cannot use the full amount of the credit to offset taxes or fees due on the tax return, can the credit be carried forward and used to offset taxes or fees in future years?


14. Does the department charge fees to a CDE that transfers its equity investment authority or to an insurer for transferring a tax credit?

1. When can a community development entity (CDE) submit applications to the Wisconsin Department of Revenue?

   The department will accept applications starting June 8, 2026. Applications will be monitored daily. The department will not approve applications for rural allocation received after the end of the day that $125 million of qualified equity investment authority is requested. Similarly, the department will not approve applications for metro allocation received after the end of the day that $125 million of qualified equity investment authority is requested.

2. How does a CDE apply?

   Apply electronically through My Tax Account (the application is under "Additional Services").

3. Is there a fee to apply?

   Yes. A nonrefundable $5,000 application fee must be paid with the application. The payment is made electronically using Automated Clearing House (ACH) through the application in My Tax Account (the application is under "Additional Services").

4. What information does a CDE need to submit with their application?

   The CDE must include the following:

   • Name, address, and tax identification number of the applicant
   • Certification as a qualified community development entity by a community development financial institutions fund (CDFI)
   • A copy of the allocation agreement between the CDE or its controlling entity and the CDFI fund
   • Certification by the executive officer attesting the allocation agreement with the CDFI fund remains in effect and has not been revoked or cancelled
   • A description of the proposed amount of investment, structure, and purchaser of the equity investment
   • The amount of rural and/or metro equity investment applied for
   • For applicants not domiciled in Wisconsin, the amount of federal CDFI awarded for rural and metro counties. Note: If not domiciled in Wisconsin, a CDE is limited to applying for rural and/or metro equity investment authority in an amount not exceeding two times the amount of qualified equity investment authority available to the applicant or its controlling entity under sec. 45D of the Internal Revenue Code.
   • If not domiciled in Wisconsin, evidence of the amount of qualified equity investment authority under sec. 45D of the Internal Revenue Code available to the applicant or its controlling entity for use in Wisconsin
   • A nonrefundable $5,000 application fee
     
     

   See attached example of the application. Important: Do not submit this document; applications must be filed electronically through My Tax Account.

   Example

   
   
5. How soon will the department approve or deny the application?

   The department will approve or deny an entity's qualified equity investment authority within 30 days and, if approved, provide a written notice of certification to the qualified community development entity. If an application is denied in full or part, the applicant is given 15 days to provide additional information.

6. What if the requested equity investment authority by all CDE applicants exceeds $125 million for either rural and metro areas?

   The department will allocate the equity investment authority for rural and metro areas separately based on a ratio of each applicant's requested amount to the total amount requested by all applicants for the rural or metro areas.

7. What if the department does not award the full amount of rural or metro allocations?

   The department may open another application period.

8. When may a CDE transfer its authority to issue qualified equity investments in rural or metro areas?

   Within 35 days after receiving the notice of certification of qualified equity investment authority from the department, the CDE may transfer all or a portion of its authority to issue the qualified equity investments to its controlling entity or an affiliate or partner of its controlling entity. The transferee must also be a qualified CDE.

   The transferor CDE must submit Form CDE-T, Community Development Entity Investment Credit Notice of Sale or Transfer, using the Community Development Entity Investment Credit- File Transmission portal, and include the following information regarding the transferee:

   • The name, address, and tax identification number of the transferee.
   • Evidence that the transferee is the transferor's controlling entity or an affiliate or partner of the transferor's controlling entity.
   • Evidence that the transferee is a qualified CDE by the community development financial institutions fund
   • A copy of the allocation agreement transferee or its controlling entity and the community development financial institutions fund
   • Attestation by the executive officer of the transferee that the allocation agreement with the community development financial institutions fund remains in effect and has not been revoked or cancelled
   • A description of the proposed amount, structure, and purchaser of the equity investment
   • If the transferee is not domiciled in Wisconsin, evidence of the amount of qualified equity investment authority under sec. 45D of the Internal Revenue Code used in Wisconsin.
     
     
9. When is the CDE required to provide the department with evidence of the cash received for qualified equity investments?

   Within 35 days after receiving the notice of certification of qualified equity investment authority from the department.

10. For a CDE not domiciled in Wisconsin, when is the CDE required to provide the department with evidence that 50% of the qualified equity investments under sec. 45D of the Internal Revenue Code is designated for use in Wisconsin?

    Within 35 days of receiving the notice of certification of qualified equity investment authority from the department. The CDE must submit the evidentiary documents through the Community Development Entity Investment Credit- File Transmission portal.

11. How does a CDE notify the department of the names of insurers that made qualified equity investments and their respective credit amounts?

    The CDE must submit Form CDE-QEI, Community Development Entity Notice of Qualified Equity Investment, through the Community Development Entity Investment Credit- File Transmission portal and include the evidentiary documents.

    Note: If the insurer that makes a qualified equity investment is a partnership, limited liability company, or tax-option (S) corporation, the CDE must notify the department of the amounts of credits allocated to, and the names of, each partner, member, or shareholder of such entity for their use in accordance with the provisions of the entity's agreement among such partners, members, or shareholders.

12. Can an insurer transfer their tax credit?

    A credit can be transferred after the amount has been claimed on the tax return. A credit must be claimed on a tax return that is filed within 4 years of the unextended due date of the tax return for the taxable year to which the credit relates. A credit cannot be transferred once it has been used to offset income or franchise taxes.

    An insurer may only transfer the credit to an affiliate of the insurer that is subject to income/franchise tax or insurance fees. No credits claimed by insurers may be saleable on the open market.

    The transferor must submit Form CDE-T, Community Development Entity Investment Credit Notice of Sale or Transfer, and copies of the transfer documents using the Community Development Entity Investment Credit- File Transmission portal.

    The transferee may first use the credit to offset their taxes or fees in the taxable year of the transfer.

13. If a claimant cannot use the full amount of the credit to offset taxes or fees due on the tax return, can the credit be carried forward and used to offset taxes or fees in future years?

    Yes, the credit may be carried forward indefinitely.

14. Does the department charge fees to a CDE that transfers its equity investment authority or to an insurer for transferring a tax credit?

    No.

Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations enacted as of May 27, 2026: secs. 71.47(11) and 76.633, Wis. Stats.

Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.