The state of Minnesota offers a very generous tax credit to certain investors. The Angel Tax credit is equal to 25% of the amount invested in a qualified activity (businesses focused on high technology, new proprietary technology, or a new proprietary product, process or service in certain fields including agriculture, tourism, forestry, mining, manufacturing and transportation). The annual maximum credit is $125,000 ($250,000 for married taxpayers) and is refundable so if your share of credit exceeds your Minnesota tax liability the excess will be refunded to you!
The state has identified $15 Million of funds available for 2015 Angel Credits. Prior to being allocated the credit, businesses and investors must be certified by DEED (Department of Economic Development). The state will start accepting certification applications from businesses and investors in November. The angel credit funds are generally allocated on a first come first served basis so it is very important to get certified now so you are ready to apply for an allocation of the 2015 credit! Applications for an allocation of the 2015 Angel Credits will be accepted beginning January 2, 2015.
In addition to meeting the qualified activity requirement, businesses must satisfy the following criteria:
Qualified investors in certified Angel businesses must:
All original 2014 Angel credit funds were allocated by early March 2014, so it’s important that companies and investors take action now. Don’t delay! Talk to your advisor today to determine if you are qualified for the credit so you can begin the certification process. For more information you can visit the state of Minnesota website http://mn.gov/deed/business/financing-business/tax-credits/angel-tax-credit/.