Opportunity Zones 2.0: A Stronger, Permanent Program
Opportunity Zones (OZs for short) are federally designated census tracts where private investors can receive significant tax advantages for investing in long-term projects that drive economic and community development. Investors who place capital into a Qualified Opportunity Fund (QOF) that, in turn, invests in a designated OZ tract may access three primary federal tax benefits: tax deferral, partial tax exclusion, and a step-up in basis on eligible gains. Opportunity Zones 2.0 builds on the first program, adding enhancements that strengthen its impact. This presents greater rewards for both investors and communities. Even better, Opportunity Zones are now permanent, and the designations are refreshed every 10 years to keep pace with investor interest and community needs.
Eligibility Updates
- Latest 2020–2024 American Community Survey (ACS) data enables more accurate community assessments
- Change in the definition of low income community
- Contiguous tract restriction to prioritize truly underserved areas
New Rural Opportunity Zones
- OZ investments receive a 10% basis step-up after a 5-year holding period, while the new rural designations provide a 30% basis step-up for QROF investments in rural areas after 5 years. This is a significant benefit for West Virginia, as the majority of our eligible tracts are expected to qualify as rural.
- Reduced substantial improvement requirement (now 50%), meaning projects no longer need to invest at least double the property’s basis to qualify.
- Designed to improve project feasibility in rural markets, like much of West Virginia
Eligible tracts were released in April released by the U.S. Treasury.
Eligible Tracts in West Virginia
Federal criteria based on 2020-2024 ACS data, published in January 2026, was used to identify more than 202 eligible tracts in West Virginia. Of these, only 52 tracts can be selected and certified. In order to be considered eligible for OZ 2.0 designation, census tracts needed:
- A poverty rate of 20 percent or higher OR
- A median family income (MFI) less than 70 percent of the relevant benchmark
- Note: Ineligible tracts adjacent to eligible tracts cannot be nominated or certified under OZ 2.0
OZ 2.0 Mapping Tool
Questions?
Additional guidance, resources, information and updates about Opportunity Zones 2.0 are available at the following federal websites:
- IRS – www.irs.gov/newsroom/opportunity-zones
Regulatory guidance, compliance requirements and tax treatment - U.S. Treasury – home.treasury.gov/policy-issues/tax-policy/data-transparency/qualified-opportunity-zones
Eligibility lists, certification process and program updates - HUD – www.hud.gov/opportunity-zones/resources
General resources, eligible programs and federal updates. - CDFA – www.cdfa.net/cdfa/cdfaweb.nsf/resourcecenters/oz.html
Financing tools, OZ education and national best practice
If you would like to connect directly about Opportunity Zones 2.0, call 304-558-2234 to connect with a team member.
West Virginia Tract Selection – Key Dates
U.S. Treasury released the list of eligible census tracts for Opportunity Zones 2.0.
West Virginia Division of Economic Development accepts tract nominations.
Federal nomination window opens (90-day submission period). Governor selects tracts to be nominated to US Treasury.
U.S. Treasury certifies the final Opportunity Zone 2.0 tracts.
New Opportunity Zone designations take effect.
West Virginia’s Designation Process
West Virginia’s Division of Economic Development (WVDED) has been appointed by Governor Morrisey to manage the Opportunity Zone 2.0 nomination process. WVDED will require that tract nominations be submitted by local economic development authorities, county commissions, or regional planning councils (“nominating entities”). Nominations should be submitted no later than July 1, 2026.
Tract designations should be based on the following guidance:
- Prioritize Tracts for Nomination. Prioritize census tracts for nomination by emphasizing clear alignment with existing community and industry priorities and expectations for impactful return on investment (ROI). Nominating entities should work closely with partner organizations and local governments to ensure each nomination reflects a shared strategy for investment. Individuals wishing to nominate a tract should work through their relevant nominating entities to advocate for submission.
This collaboration should demonstrate how the region will work together to support investment in the nominated tract, tying submissions to current projects, industry priorities, and community plans to strengthen the case for designation.
- Connect to Strategy. Demonstrate how OZ designation advances existing regional goals such as housing, healthcare, downtown revitalization, workforce development, tourism, cultural assets, and broader economic initiatives already underway.
- Advance Project Readiness. Communities should prioritize tracts where private capital can realistically deploy in 24–48 months and where investments drive growth in the community.
- Engage Local Investors. Engage local investors by assessing interest and building awareness of OZ 2.0. Consult with financial institutions to determine whether Opportunity Zone funds are on their radar and actively promote and educate high-net-worth individuals, institutions, and area businesses on the benefits of OZ 2.0 and how targeted investments can support regional development.
WVDED will develop recommendations for Governor Morrisey, who intends to submit tract requests to the U.S. Treasury by September 28, 2026. Nominators of tracts approved for the OZ 2.0 program will be advised as soon as we have received confirmation from the U.S. Treasury in advance of the new program start date of January 1, 2027.
