The City of Frederick encompasses two federally-designated incentive zones- the Opportunity Zone and the HUB Zone. Learn more about these programs below, as well as additional resources for tax credits and grants at the Federal level.
- General Eligibility: A Qualified Opportunity Fund is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in an Opportunity Zone and that utilizes the investor’s gains from a prior investment for funding the Opportunity Fund.
- Temporary Deferral - A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026.
- Step-Up Basis - For capital gains reinvested in an Opportunity Fund, the basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation.
- Permanent Exclusion: a permanent exclusion from taxable income of capital gains from sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.
- Application: Contact the Department of Economic Development for more information at this time
- General Eligibility: A small, American-owned business with its principal office located in a HUBZone in which at least 35% of its employees live in a HUBZone
- Benefits: preferential consideration for government contracts --- Ability to compete for set-aside contracts, and a 10% price evaluation preference in full & open competitions
- Application: Visit the SBA's page for step by step instructions to become certified as a HUBZone business
Additional resources for Federal Grants and Tax Credits: