As of this week — Minnesota tech startups, investors and funds looking to get a jump on 2014 can submit their applications for a crack at some $12m in Minnesota Angel Investor Tax Credits (AITC).
Passed in the spring of 2010 as part of the broader Jobs Bill ( H.F. 2695), the AITC provides tax incentives to investors or investment funds that put money into startup and emerging companies focused on high technology or new proprietary technology:
- Provides a 25-percent individual income tax credit for qualified investors
- Is refundable. Non-Minnesota residents, including residents of foreign countries, are eligible for the credit
- Allows a maximum credit of $125,000 per year per individual
- Allows a maximum credit of $250,000 for those married and filing jointly
Jeff Nelson from the Department of Employment and Economic Development (DEED) says the respective parties can become approved and queued in advance of processing tax credit allocations in January. In 2012, the credits ran out in July and last year they dried up in May. How fast will they go this year?
Some statistics from 2013’s fiscal year include:
- Total investment amount made through AITC 2013 was $50.6m; $12.4m in credits issued
- 193 companies certified overall & 128 received investment
- 484 investors certified & 452 made investments
- 21 funds certified & 20 made investments
- 69% of investors were from Minnesota, 31% were out-of-state
- 71% of investment dollars came from Minnesota and 29% came from outside the state
- Software was the top business category
“2014 is the last year for the angel tax credit as of right now,” Nelson says, “Well know more about the future in the upcoming legislative session.”