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OZ 2.0 | State Resource

What Happens Next

The final OZ 2.0 map is out — 6,576 tracts, in effect January 1, 2027. This page tracks the sequence from the governors' filing deadline through Treasury certification and into the designation period — and what the transition rules mean for anyone with a project already underway.

Where we are

57

Days until designations take effect

The map is settled. Find out which of your tracts made it, which OZ 1.0 tracts did not, and who is already working in the ones that did.

Treasury published the final list on October 30, 2026. See who was designated and why, or go to your state page for its tract list.

The timeline

Dates below come from IRC § 1400Z-1 as amended by P.L. 119-21 (OBBBA) § 70421, IRS Rev. Proc. 2026-14, and IRS Notice 2026-40. Where a date depends on whether a state or Treasury takes an available extension, it is marked as the outer bound.

  1. September 28, 2026

    Governors' filing deadline

    Close of the 90-day determination period that opened July 1. A governor may request one 30-day extension, moving that state to October 28. States can revise a filing any time before their window shuts; Treasury does not process early filings until the window closes.

  2. October 26, 2026

    Comments close on the OZ reporting rule

    REG-116506-25 builds out the § 6039K / § 6039L information-reporting regime and new QOF certification and decertification procedures. A public hearing follows on November 5, 2026. This is the rule that determines how much the public will be able to see about where OZ 2.0 money actually goes.

  3. December 27, 2026

    outer bound in 53 days

    Latest possible Treasury certification

    Treasury has 30 days from receipt to certify a state's nominations, extendable by another 30. For a state that used the full extension, that pushes certification as late as December 27, 2026. Most states should be certified well before then.

  4. October 30, 2026

    Treasury publishes the final designations

    Treasury posted the 2027 QOZ list — 6,576 tracts across all 50 states, DC and five territories, 2,594 of them rural — together with a revised eligible-tract file that adds 130 tracts qualified under its missing-data rules. Every state used its full allocation.

  5. December 31, 2026

    in 57 days

    OZ 1.0 deferred gains become taxable

    The mandatory inclusion date for gains deferred under the original program. Notice 2026-40 confirms this inclusion cannot itself be deferred by rolling into a new OZ investment.

  6. January 1, 2027

    in 58 days

    OZ 2.0 designations take effect

    The new map is live for a ten-year period running through December 31, 2036. The QROF rural provisions — the 30% basis step-up at five years and the 50% substantial-improvement threshold — apply to investments from here.

  7. December 31, 2027

    Puerto Rico OZ 1.0 designations expire

    Puerto Rico tracts deemed designated under the original statute expire a year ahead of the rest.

  8. December 31, 2028

    OZ 1.0 designations expire

    The end of the 2027–2028 overlap. From here, only OZ 2.0 tracts qualify.

  9. December 31, 2036

    First OZ 2.0 designation period ends

    OBBBA made designation decennial, so a new round of nominations follows rather than the program lapsing.

How certification actually works

Three details about the filing process are worth knowing, because they change how much weight to put on early state announcements.

  • A filing is not final until the window shuts. States may submit and revise nominations multiple times during their determination period. A state that announced a list in July can still change it.
  • Treasury does not process early filings early. Nominations submitted at the start of the window are not acted on until the window closes, so filing first confers no advantage and produces no earlier certification.
  • Extensions stack. A governor may request one 30-day extension, moving that state's deadline to October 28, 2026. Treasury then has 30 days to certify, extendable by another 30. For a state that used every available extension, certification could come as late as December 27, 2026 — four days before the designations take effect.

In the event, Treasury published every jurisdiction's designations together on October 30, 2026, well inside the outer bound. Where states had announced counts in advance, the certified figure differed slightly — Arizona reported 125 tracts and was certified for 127, Texas 605 and 608 — because the cap was recomputed on Treasury's revised eligible list. The final list →

The 2027–2028 overlap

OZ 2.0 designations begin January 1, 2027, but OZ 1.0 designations do not expire until December 31, 2028 — December 31, 2027 for Puerto Rico tracts deemed designated under the original statute. Both maps are therefore live during 2027 and 2028. IRS Notice 2026-40, issued in July 2026, is the transitional guidance that governs the overlap.

What Notice 2026-40 establishes

  • Existing OZ 1.0 investors keep the 10-year tax-free appreciation benefit. Nothing about the new program disturbs an investment already made.
  • New capital invested on or after January 1, 2027 generally cannot go into an OZ 1.0 tract that was not also designated under OZ 2.0. The narrow exception is a project operating under a working capital safe harbor plan adopted on or before December 31, 2026, where at least 10 percent of the planned working capital had been received and 5 percent expended by that date.
  • Existing OZ businesses may continue ordinary-course replacement and modernization of property after 2026 without losing qualification.
  • The mandatory December 31, 2026 inclusion of gains deferred under OZ 1.0 cannot be deferred again by rolling into a new OZ investment.
  • Gains from an inclusion event remain eligible for reinvestment into OZ 2.0 and the new rolling five-year deferral.

Why this matters locally

Every state is nominating from a smaller pool than it had in OZ 1.0, and the contiguous-tract pathway is gone. Many tracts designated in 2018 will not be designated again. If your community has a half-built OZ 1.0 project, the question is no longer whether the tract stays eligible in the abstract — it is whether a working capital plan was in place before the end of 2026, or whether that tract made your governor's OZ 2.0 list. Those are two different conversations with the lead agency, and the second one is resolved at certification.

Notice 2026-40 is transitional guidance, not final regulations. Treasury has signaled that provisions may be revised through the ongoing rulemaking. Confirm current treatment with tax counsel before relying on any of the above for a transaction.

The reporting rule — the thing to actually watch

The single largest documented failure of OZ 1.0 was that nobody could see where the money went. The first tract-level investment data did not arrive until years in, and it showed 42 percent of capital landing in the top 1 percent of tracts and 8.5 percent reaching rural areas — findings that arrived far too late to change program design. See the OZ 1.0 retrospective.

OBBBA § 70421 addressed this directly by adding IRC §§ 6039K and 6039L, with penalties under § 6726. On September 11, 2026 Treasury and the IRS published REG-116506-25, the proposed regulations that implement it. Under the proposal, a qualified opportunity fund must report annually:

  • total assets and the value of qualified OZ property held
  • the specific census tracts invested in, and the amount in each qualified OZ business
  • NAICS codes for the underlying businesses
  • approximate full-time employees
  • residential unit counts where the investment is a housing development
  • whether tangible and intangible property is owned or leased

Treasury is required to publish annual reports beginning in 2027, with expanded reports in year six and year eleven. Non-compliance carries a penalty under new IRC § 6726 of $500 per day, capped at $10,000 — or $50,000 for a large QOF, meaning one holding more than $10 million in gross assets. Intentional disregard raises the daily rate to $2,500, capped at $250,000 for a large QOF. OZ 1.0, by contrast, required only an annual self-certification on Form 8996 with no meaningful penalty behind it.

Comments close October 26, 2026, with a telephonic public hearing on November 5, 2026. This is the rule that decides how much the public will be able to see about OZ 2.0 — including whether the tract-level detail is published in a form that communities can actually use, or only filed with the IRS. For anyone who wants OZ 2.0 evaluated more honestly than OZ 1.0 was, this comment period matters more than any remaining nomination advocacy.

REG-116506-25 (RIN 1545-BR82), Information Reporting Regarding Qualified Opportunity Zones and Updated Qualified Opportunity Fund Certification and Decertification Procedures. See references §17.

What to do in the meantime

Local planners and EDD staff

Nomination advocacy is effectively over. The work that pays off now is readiness: site control, entitlements, a defensible pro forma, and a named local partner for any project you want financed in 2027. Ask your lead agency, in writing, when it will publish the tracts it submitted — several states have committed to publishing after certification and will do so faster if asked. If a tract you care about is not on the list, the capital stack page covers what still works without an OZ designation: NMTC, CDFI lending, and CRA-motivated bank capital all run on their own eligibility tests.

Community organizations

The leverage moment shifts from which tracts get designated to what terms attach to the projects inside them. Community benefits agreements are negotiated at the deal, not at the designation, and the new § 6039K reporting gives those agreements something OZ 1.0 lacked — a public record to check them against. The coalition playbook covers how to organize for that, and the case studies show what community-aligned OZ deals looked like when they worked.

Investors and fund sponsors

Two deadlines are converging: the December 31, 2026 mandatory inclusion on OZ 1.0 deferrals, which cannot be re-deferred, and the start of the QROF rural provisions on January 1, 2027 — a 30 percent basis step-up at five years and a 50 percent substantial-improvement threshold instead of 100 percent. The QROF mechanics section covers how that changes rural deal math, and the finance study guide works through the underlying arithmetic.

Sources for this page are listed in references §17. Last reviewed September 18, 2026.