How many census tracts are eligible for Opportunity Zone 2.0 designation?

Revenue Procedure 2026-12 identifies 25,332 population census tracts across the United States, the District of Columbia and U.S. territories as eligible for Opportunity Zone designation in 2027. Eligibility was determined using the 2020-2024 American Community Survey five-year dataset, which the IRS formally adopted as the controlling data source. Governors may nominate up to 25% of their state's eligible tracts, so not all 25,332 will be designated.

What is the deadline for governors to nominate Opportunity Zone 2.0 tracts?

The nomination window opened July 1, 2026, placing the initial submission deadline at September 28, 2026. A single 30-day extension is available, which could move final submissions to October 28, 2026. States may submit and revise nominations multiple times during the window, and no nomination is processed until the window closes, so filing early confers no advantage. The IRS expects to publish the final designated zones before January 1, 2027.

What additional tax benefits do rural Opportunity Zone investments receive?

Under the One Big Beautiful Bill Act, investors in a Qualified Rural Opportunity Fund receive a 30% basis step-up after five years, three times the standard 10% step-up. Rural properties also benefit from a reduced substantial improvement threshold of 50% rather than 100%. Of the 25,332 eligible tracts, 8,334 are classified as fully rural, and states are required to give rural communities meaningful representation in their nominations.

Will Opportunity Zone 2.0 have fewer designated zones than the original program?

Yes. The original program designated 8,764 zones. Industry estimates place OZ 2.0 at roughly 6,300 to 6,500 zones, a reduction of about 25%. The eligibility rules tightened in three ways: the median family income threshold dropped from 80% to 70%, the contiguous tract provision that allowed some higher-income areas to qualify was eliminated, and tracts qualifying on high poverty rates are now disqualified if median family income exceeds 125% of the area median.

Can Opportunity Zone 2.0 tract boundaries change after designation?

No. OZ 2.0 tract boundaries are drawn from the 2020 decennial census map and are fixed for the full period the designation is active, from January 1, 2027 through December 31, 2036. The guidance permits no redrawing of lines, no splitting of tracts and no adjustments of any kind, giving investors and fund sponsors boundary certainty for long-horizon underwriting.

Why is Puerto Rico's Opportunity Zone timeline different from the 50 states?

The 2018 Bipartisan Budget Act automatically designated every eligible Puerto Rico tract as an Opportunity Zone and backdated that designation to the passage of the Tax Cuts and Jobs Act on December 22, 2017. Because the 10-year clock began in December 2017 rather than 2018, it ends in December 2027 rather than December 2028, giving Puerto Rico investors one less year than many assume. Going forward, Puerto Rico's governor will nominate up to 25% of eligible tracts like every other state.