The purpose of the Angel Investment Program is to attract and encourage the placement of investment dollars into early-stage, innovative companies throughout Illinois. The investment dollars provide these companies with much needed access to working capital to further their growth and success in our state. The Angel Program is allocated $10 million in tax credits annually, from 2011-2016. Tax credits are awarded on a first-come, first-served basis. The Department of Commerce and Economic Opportunity administers the Angel Program.
The Angel Program offers a tax credit to qualifying claimants in an amount equal to 25% of the claimant’s investment made directly in a qualified new business venture. *Made simply, if an investor places $100,000 into an eligible program qualified business, they would receive a $25,000 tax credit. While the tax credit may not exceed the taxpayer's Illinois income tax liability for the taxable year, the credit may be carried forward for up to 5 years following the excess credit year. Potential Angel investors must adhere to the following requirements:
- Investment must be invested into a registered qualified new business venture. *Investments occurring prior to a business’s eligibility with the Angel program are ineligible to receive a tax credit.
- The maximum amount of an investment that may be used toward the credit is $2,000,000 per investment.
- Investment must remain in the qualified new business venture for at least 3 years and attestation must be submitted on the first, second and third anniversary of investment. Attestation forms will be accepted within 30 days prior to the anniversary of the investment.
- The tax credit cannot be sold or otherwise transferred to another person or entity.
- Only equity investments are eligible for the tax credit. Convertible notes will not be accepted until it converts to equity, but it must convert in the same calendar year.
- Please include proof that funds were transferred to the Qualified New Business Venture, documentation from the Qualified New Business Venture that the investment was made (documentation that states the type of equity investment) and proof that the funds were received from the Qualified New Business Venture. In addition, the agency may request additional documentation.
Investor applications and forms:
Businesses desiring the qualified new business venture status must register for each taxable year in which the business desires registration. Businesses desiring eligibility with the Angel Program must satisfy the following requirements:
- Principally engaged in innovation
- Has fewer than 100 employees upon submitting initial application
- At least 51% of employees located in Illinois
- Headquarters located in Illinois
- Been in operation in Illinois for no more than 10 consecutive years prior to certification
- Has the potential to create jobs or capital investments, or both
- Has not received more than $10 million in aggregate private equity investments, or $4 million in investments that qualified for tax credits
- Be registered with the Illinois Secretary of State’s Office to transact business in Illinois
Business applications and forms:
Available Tax Credits (per calendar year)
***The maximum amount of tax credits is capped at $10,000,000 per calendar year. If the $10 million in allocated tax credits have been issued prior to January 1st of the next calendar year, the Department will not accept any new applications for the remainder of the current year. The Department will begin accepting new applications beginning January 1st on new investments that are made from that date forward. Tax credits will be awarded on a first-come, first-served basis on completed applications.
For specific program language in the law that establishes this program (Public Act 097-1097) and the associated rulemaking, please follow the links below:
Current or previously registered QNBV’s in the 2015 Angel Program