The latest round includes tracts designated under the original program. All 20 approved tracts in Southern Illinois Now’s 17-county region qualify for enhanced rural incentives.

Twenty census tracts in the 17-county region represented by Southern Illinois Now (SI Now) have been approved for Opportunity Zones 2.0, the next round of the federal program that encourages long-term private investment in designated communities. The approved tracts include locations that participated in the original program. The 2.0 designations take effect January 1, 2027, and the region’s tracts are among 240 approved statewide.

View the map of approved Illinois Opportunity Zones 2.0 census tracts

How Southern Illinois identified its priorities

SI Now worked directly with municipalities and local economic development organizations to identify the region’s strongest candidates for nomination. The work centered on what could realistically be built, expanded or redeveloped in each tract. SI Now and its partners looked at established industrial parks, potential mixed-use projects, planned housing developments and other sites with room for investment. They also considered the assets that could help those projects move forward, including existing incentive zones and access to transportation and logistics networks.

That regional work was part of a broader effort led by the Illinois Department of Commerce and Economic Opportunity (DCEO). The state reviewed more than 500 nominations through a data-driven evaluation and extensive statewide engagement. DCEO weighed economic need, business and investment potential, housing and workforce conditions, and opportunities to pair the federal incentive with other public and private investment.

“Through a data-driven evaluation and extensive statewide engagement, we identified 240 census tracts with potential to attract new investment, support business growth, expand economic opportunity, and strengthen local economies." said DCEO Director Kristin Richards. "As we move toward implementation, DCEO will continue working alongside local leaders, businesses, investors, and economic development partners to help ensure these designations support long-term, inclusive growth in communities throughout Illinois.”

What Opportunity Zones 2.0 means for investors and communities

Opportunity Zones use federal tax incentives to encourage investors to reinvest eligible capital gains in designated census tracts. Congress made the program permanent in 2025 and established a new designation cycle every 10 years. Opportunity Zones 2.0 is the first round under those updated rules.

An investor can reinvest an eligible gain through a Qualified Opportunity Fund, which can invest in qualifying businesses or real estate within an Opportunity Zone. Under the updated rules, investors can generally defer recognition of the original gain for federal tax purposes for up to five years. At five years, a standard fund investment can receive a tax basis increase equal to 10% of the deferred gain. Investors who hold a qualifying investment for at least 10 years may also be able to exclude appreciation on the fund investment from federal taxable income, subject to program rules.

In Southern Illinois, that capital could help a manufacturer expand at an established industrial park, finance a mixed-use project with storefronts and apartments, support a planned housing development, or bring a vacant commercial building back into use. Projects and investments must meet federal program requirements.

What the rural designation adds

All 20 approved tracts in SI Now’s region qualify as Rural Opportunity Zones. The updated program offers two advantages for qualifying rural investments.

• A larger benefit after five years. Investors who hold a qualifying investment in a Qualified Rural Opportunity Fund for at least five years can receive a tax basis increase equal to 30% of the original deferred gain, compared with 10% under the standard program.
• A lower threshold for rehabilitating existing buildings. Where the federal substantial improvement test applies, qualifying improvements must exceed 50% of the property’s adjusted tax basis in a Rural Opportunity Zone, compared with 100% under the standard rule. That lower threshold can make it easier to qualify when redeveloping an existing building.

Another tool to attract investment to Southern Illinois

Opportunity Zones 2.0 gives Southern Illinois communities another tool to attract investment to projects they’re already working to advance. An industrial park may have the transportation access a manufacturer needs. A downtown site may have a plan for housing or commercial space. The designation gives local partners another way to make the case for those projects when they sit down with investors and developers.

Have a project that could benefit from Opportunity Zones 2.0? Reach out to Southern Illinois Now. We can help you check whether your project is in a designated tract and connect you with resources to explore the incentive!