What to know about the Minnesota Angel Tax Credit for 2015


Last year, the state legislature extended Minnesota’s Angel Investment Tax Credit (AITC) program for 2015 & 2016, creating $30M in additional incentives for investing in certain Minnesota businesses.

Introduced in 2010, the AITC provides a 25-percent credit to qualified investors or investment funds that put money
into qualified companies focused on high technology or new proprietary technology.

Those already familiar with the program know two things: (1) Information Technology startups typically count for between 33-50% of the credits allocated & (2) tax credits tend move quickly once the term begins.  We spoke with DEED program manager Jeff Nelson for an update on all things AITC; here’s the core parameters to know going into next year:

  • $15m in overall tax credits available for Jan 1 – Dec 31, 2015
  • $7.5m is reserved for three specific types of businesses: greater MN (outside seven county metro), women and minority owned.
  • Any unclaimed funds from the $7.5m carve out not used by Sept. 30th roll back for any business.
  • A fourth category of companies are now eligible for the program (beyond those proprietary technology) to include: researching or developing a proprietary process or service in agriculture, tourism, forestry, mining, or transportation.
  • Officers & Principals of the business being invested in are not eligible for investor credits.
  • Owners of 20% or more voting securities of the business are not eligible for the credit (including family members).
  • Businesses cannot raise more than $4m pursuant to the program ($1m in total credits)
  • Investors annual limit is married filed jointly max out at $250k in credits; filing single $120k credits.
  • Annual certification for businesses, investors and funds is required.
  • The 2015 certification process for businesses, investors and funds opened November 1st.
  • Allocations received before January 1 will be considered as having arrived on January 1 and get equal treatment; they will be processed before those arriving after January 1.