IRS Sets Guidance on Nominating Rural Areas as Opportunity Zones

The IRS issued guidance Monday on how states and territories should nominate rural areas to be designated as qualified opportunity zones eligible for tax breaks.

The Treasury Department is developing a nomination tool that will be accessible online for states and territories to nominate census tracts, the IRS said in the guidance (Rev. Proc. 2026-12).

The guidance is the latest step toward implementing the qualified opportunity zone provisions of the 2025 tax-and-spending law. The law offers more generous short-term tax breaks in rural opportunity zones, and lowers the “substantial improvement” threshold for how much investors must add to ...