In March 2011, the State of Illinois’ Department of Commerce and Economic Opportunity enacted the Illinois Angel Investment Tax Credit Program. The program gives angel investors a tax break for investing in businesses founded and headquartered in Illinois. Here’s the basic breakdown of information for entrepreneurs and investors. FOR ENTREPRENEURS:
- Business must be headquartered in Illinois with over 51 percent of workers employed in Illinois.
- Innovative companies with less than 100 total employees at original founding with the potential for increased capital and employment opportunities are eligible to receive tax credited investments.
- The company must come into existence less than 10 years prior to certification with the program.
- Less than “$10,000,000 in aggregate private equity investment in cash or $4,000,000 in investments that qualified for tax credits,” can be received, according to the DCEO website.
- Upon approval of registration and qualification, the Department will notify the eligible company in writing.
- Registration must be done each taxable year to continue as a qualified business. So far, 20 companies are listed as eligible.
FOR INVESTORS:
- Individual investors or investment firms can receive up to $10,000,000 in tax credits per calendar year while registering and adhering the program’s guidelines.
- The investment made to a company needs to stay with the company for no fewer than three years.
- Qualified investors can register and receive up to 25 percent of their investment to a registered and qualified company back in tax credit.
- Once a credit has been given, it cannot be transferred or sold to another investor or entity.
- The basis of the credit cannot exceed the maximum of $2,000,000 per investment.
- Permission for the program will be granted to firms on first-come/first-serve.
For more information about the program, visit the DCEO’s website.
