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IMPORTANT: As of July 1st, 2011, functions once performed by the Wisconsin Department of Commerce have been moved to other state agencies and the Wisconsin Economic Development Corporation. The former Commerce web site will continue to exist for the next several months as resources are moved to new web site locations. We will make every attempt possible to direct our users to the new locations as web resources are moved.
Angel Investment Tax Credit Program
Angel
investors and
angel investor networks that invest in Qualified New Business Ventures
may be eligible to claim an income tax credit on that investment, up to 25% of the investment amount.
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Wisconsin Tax
Credits
Currently Available
to Angel Investors
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Credits remaining for 2006:
$578,071
Credits remaining for 2007:
$949,537
Credits
remaining for 2008: $2,840,620
Credits remaining for 2009:
$0
Credits remaining for 2010:
$1,542,129
Credits remaining for 2011:
$19,720,730
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Timing of
Investments
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Angel
investors and
angel investor networks may be considered for tax credits based on
their investments in busineses that have already been certified by
Commerce as Qualified New Business Ventures. Investments
taking
place before a business's certification will not be eligible for tax
credits.
Beginning
January
1, 2006, angels will only be able to earn tax credits for investment in
businesses with whom they had no previous investment activity before
the date of the Qualified New Business Venture certification.
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Tax Credit Forms
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Tax credit reporting materials may be
obtained by contacting Chris Schiffner, 608/267-2425.
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Angel investors are accredited (sophisticated) investors, for
the
purposes of this program, as determined by the Department of Commerce
(see Accredited (Sophisticated) Investor Status Form), whose cash
investment in a Qualified New Business Venture is made in exchange for
common stock, a partnership or membership interest, preferred stock or
an equivalent ownership interest that is acceptable to
Commerce.
An angel investment network is a group of accredited (sophisticated)
investors organized for the sole purpose of investing in a single
Qualified New Business Venture.
Angel Investor FAQ's:
- A Qualified New Business Venture is an early-stage company
with high-growth potential that meets the Department of Commerce's eligibility criteria.
To qualify for tax credits, that business must be certified by Commerce
as a Qualified New Business Venture prior
to the angel or angel network's investment in the business (For a list
of certified businesses, click
here).
- A tax credit may be
earned on each investment made in a
Qualified New Business Venture. Commerce may allocate $6.5
million in tax credits in 2010 and $20 million in each calendar year
after December 31, 2010.
Commerce will, however, make every effort to issue the tax credits
continuously.
Investments taking place after the annual maximum has been
reached may be able to earn credits in the next available year.
- Businesses can receive up to $8 million in tax credit-eligible cash equity investment.
To claim tax credits earned through their investments,
angel investors must follow the Department of Commerce's verification
process. Investors and Qualified New Business
Ventures must also comply with certain subsequent reporting
requirements.
For more information about
Angel Investment Tax Credits, contact:
Aaron Hagar
Technology Development Manager
608/267-0769
Aaron.Hagar@Wisconsin.gov
The
State of Wisconsin
does not endorse the quality of management or the potential for
earnings of the certified Qualified New Business Venture.
Furthermore, the Qualified New Business Venture's use of the phrase
"certified" and/or "qualified new business venture" is not a
recommendation or endorsement of the investment or the company by the
Wisconsin Department of Commerce.
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