Off-List Nominations

What Section 5.04 says

Section 5.04, titled "Data set limitations," reads:

"While the Appendix to this revenue procedure and the Information Resource provide a list of population census tracts that are eligible for nomination as a QOZ, there may be population census tracts that could be eligible for nomination as a QOZ that do not appear on this list. The Secretary will consider a State CEO's nomination of a population census tract not listed in the Appendix or Information Resource to the extent that the nomination is accompanied by a detailed analysis, including current data collected at the census tract level, demonstrating the nominated population census tract satisfies the requirements under § 1400Z-1(c)(1)."

Source: IRS Rev. Proc. 2026-14, Section 5.04 (April 6, 2026).

The LIC standard a tract must meet

An off-list tract must qualify as a low-income community (LIC) under § 1400Z-1(c)(1) — the same standard applied to all 25,332 tracts on the published eligible list. The IRS used 2020–2024 ACS 5-year estimates to generate that list; an off-list submission must use "current data collected at the census tract level," though Rev. Proc. 2026-14 does not mandate a specific dataset beyond that standard.

The LIC definition distinguishes metropolitan from non-metropolitan tracts. For non-metropolitan tracts, a tract qualifies if its median family income (MFI) does not exceed 70 percent of the statewide median family income, or if its poverty rate is at least 20 percent and its MFI does not exceed 125 percent of the statewide median family income. For metropolitan tracts, the same two-prong test applies, but the income comparison uses the metropolitan area median rather than the statewide median.

The contiguous-tract pathway that existed in OZ 1.0 was eliminated by the One Big Beautiful Bill Act. Every nominated tract — whether on-list or off-list — must qualify on its own merits.

How off-list nominations count against the cap

Section 5.04 creates no separate budget for off-list nominations. They count toward the same 25-percent-of-LICs cap that governs all designations under § 1400Z-1(d)(1). For states with fewer than 100 LICs, the cap is 25 total designations regardless. Each off-list nomination is a direct trade-off against a slot that could otherwise go to a tract already on the IRS eligible list.

Rev. Proc. 2026-14 creates no special provision for off-list nominations involving rural tracts or tribal lands. The rural designation carries investor tax benefits under the qualified rural opportunity fund rules but does not create a separate off-list pathway.

What to include in the analysis package

Rev. Proc. 2026-14 requires a "detailed analysis" with current, tract-level data. At minimum, that means documentation sufficient to establish the LIC thresholds above. In practice, a complete package would include the census tract GEOID, the relevant ACS estimates (poverty rate, median family income, comparison area median), the source and vintage of those figures, and a narrative explaining why the tract does not appear on the IRS list — for example, because the IRS data snapshot predates a revision or because a tract boundary change affected the published list.

The submission goes through the same Treasury Nomination Tool used for on-list tracts. Treasury will send access instructions directly to each State CEO. The same window applies: nominations open July 1, 2026 and close September 29, 2026, with a possible 30-day extension to October 28, 2026 upon request.

Practical implications for local planners

The off-list pathway exists to catch data-quality gaps in the IRS appendix — tracts that meet the statutory criteria but were excluded due to the data vintage or methodology used to generate the list. It is not a discretionary mechanism for nominating tracts that simply fall short of the LIC thresholds.

If you believe a tract in your jurisdiction should appear on the eligible list, the first step is to verify against the published appendix using the EIG eligibility map or the Novogradac mapping tool. If the tract is absent, pull current ACS data from the Census Bureau for the tract and confirm it meets the income or poverty thresholds. Then bring that documentation to your state lead agency — the governor's office will need to include the off-list nomination in the state's submission to Treasury.

Because off-list slots compete directly with on-list nominations, state agencies will weigh them against other candidates. A strong case requires not only the LIC data but also the community readiness and investment narrative that most states ask for in their selection processes. See How to Advocate for guidance on building that case.