Accessing Financial Opportunity Zones in Illinois and Wisconsin
A practical guide to opportunity zones in Illinois and Wisconsin and how these programs support investment, job creation and community growth.
What are Opportunity Zone programs?
Thousands of areas across all 50 states, Washington, D.C. and U.S. territories have been designated as Qualified Opportunity Zones. They were identified using data such as poverty rates, unemployment levels and population trends.
What are Qualified Opportunity Funds?
Investments in Opportunity Zones are made through Qualified Opportunity Funds (QOFs), which move capital into businesses and projects located within designated areas.
A Qualified Opportunity Fund allows taxpayers who invest in Qualified Opportunity Zone property to temporarily defer tax on the amount of eligible gains they invest. They’re designed to finance projects that support long-term economic growth, such as expanding local businesses, developing real estate or improving infrastructure in underserved communities.
How opportunity zones can help communities and businesses
Financial Opportunity Zone programs are intended to facilitate private investment for public benefit. When structured correctly, they can:
- Encourage long-term capital investment in underserved areas.
- Support business expansion and job creation in communities.
- Promote neighborhood revitalization and economic stability.
- Offer tax deferral and potential tax benefits to investors.
For business owners, opportunity zones can increase access to patient capital through tax deferral and help fund growth initiatives that may otherwise be difficult to finance.
Financial Opportunity Zones in Illinois
Illinois Opportunity Zones were designated in 2018 following a statewide analysis that considered factors such as poverty, unemployment, violent crime rates and the number of children living in poverty.
These zones include communities in Chicago and other tracts across Illinois seeking economic revitalization. To determine if a business or project is located in an Illinois Opportunity Zone, you can verify census tract data with the U.S. Census Bureau’s geocoder and Opportunity Zone maps.
Illinois supports Opportunity Zone Development through public and private partnerships. The Illinois Department of Commerce and Economic Opportunity has awarded millions of dollars in grants to communities to support planning and investment efforts tied to Opportunity Zones.
Wisconsin Opportunity Zones and state-specific benefits
Wisconsin Opportunity Zones were also designated in 2018 and fully align with the federal Opportunity Zone program. Wisconsin follows the federal tax benefits such as tax deferral and exclusion opportunities while offering additional state-level incentives for qualifying investments. These state tax benefits may further reduce the taxable amount of deferred gains when investments meet long-term holding requirements.
Investments in Wisconsin are often made through Wisconsin Qualified Opportunity Funds, which must hold at least 90% of their assets in qualified Opportunity Zone properties within the state.
What this means for business owners in Illinois and Wisconsin
Opportunity Zones are not intended for only large developers or institutional investors. Small business owners may also benefit by locating, expanding or partnering with projects in designated Opportunity Zones.
Here are some practical starting points:
- Confirm whether your business or project is in an Opportunity Zone.
- Understand how investment in Opportunity Zones works and the role of Qualified Opportunity Funds.
- Work with financial and tax professionals to evaluate eligibility and compliance.
- Align growth plans with long-term community and economic goals.
Because Opportunity Zone rules are complex and time-sensitive, starting early with planning is essential to fully understand their potential benefits and obligations.
How community grants complement opportunity zone investment
Opportunity Zones focus on investment, while community grants focus on direct support for programs that strengthen local economies. Together, they can play a meaningful role in community development.
Associated Bank and the Associated Bank Foundation support community well-being through charitable grants to nonprofit organizations across Illinois, Wisconsin and Minnesota. Each year, they award millions of dollars to programs that advance affordable housing, small business development, workforce development, sustainability and economic empowerment.
If you’re a business owner or community leader, your partnership with local nonprofits supported through community grants can further help to extend the impact of your Opportunity Zone investment and create a more resilient local economy.
Financial Opportunity Zone FAQs
What are Opportunity Zone programs?
Financial opportunity zone programs are federal economic development initiatives that encourage long-term investment in designated communities to support job creation and local growth.
What is an Opportunity Zone?
An Opportunity Zone is a census tract identified by the U.S. Department of the Treasury as an area that may benefit from increased investment and economic development.
How do Opportunity Zone tax benefits work?
Opportunity Zone tax benefits may allow investors to temporarily defer eligible capital gains when they invest through Qualified Opportunity Funds and meet certain holding requirements. Some states also have various state-specific tax benefits that may help to further reduce your tax burden.
What are Qualified Opportunity Funds?
Qualified Opportunity Funds are investment vehicles that hold at least 90% of their assets in businesses or property located within designated Opportunity Zones.
How can I find Opportunity Zones in Illinois or Wisconsin?
Use the U.S. Census Bureau’s geocoder and state-specific Opportunity Zone maps or websites to confirm whether a specific address or census tract eligible.
Can small businesses benefit from Opportunity Zone investment?
Yes. Small businesses may benefit by locating or expanding within Opportunity Zones or by partnering with projects funded through Qualified Opportunity Funds.
For Informational/Educational Purposes Only: The opinions expressed may differ from other employees and departments of Associated Bank N.A., or any bank or affiliate. Opinions and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results. (1513)
Associated Banc-Corp Foundation, Inc. dba Associated Bank Foundation is a 501(c)(3) private non-operating foundation. (1452)