***Credits for the 2016 allocation in the Angel Investment Credit Program have been exhausted. Claimant applications for new investments will not be accepted.***
The Illinois Angel Investment Credit Program attracts and encourages investment dollars into early-stage, innovative companies throughout Illinois. Investments provide these companies with much needed access to working capital to further their growth and success in our state. The Program is allocated $10 million in tax credits annually, from 2011 through 2016. Tax credits are awarded on a first-come, first-served basis.
Offers tax credits to qualifying claimants in an amount equal to 25% of the claimant’s investment made directly in a qualified new business venture. *If an investor places $100,000 into an eligible 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:
- Must invest in 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.
- Maximum investment amount used toward tax credit is $2,000,000 per investment.
- Investment must remain in 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.
- Tax credits cannot be sold or otherwise transferred to another person or entity.
- Only equity investments are eligible for tax credits; convertible notes not be accepted until it converts to equity, but must convert in same calendar year. Exceptions are Simple Agreement for Future Equity (SAFE) Agreements. If you wish to use this agreement, it must follow the approved template, which can be found here under "Investor applications and forms."
- Must include proof that funds were transferred to Qualified New Business Venture, documentation from Qualified New Business Venture that investment was made (documentation states type of equity investment) and proof that funds were received from Qualified New Business Venture. Department may request additional documentation.
Investor applications and forms:
Businesses must register for each taxable year in which they desire to be a qualified new business venture (QNBV). Businesses seeking eligibility with the program must satisfy the following requirements:
- Principally engaged in innovation
- Fewer than 100 employees upon submitting initial application
- At least 51% of employees located in Illinois
- Headquarters located in Illinois
- 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:
Current or previously registered QNBV’s in the 2015 Angel Program
How to Apply
All questions, QNBV registrations, re-registrations and claimant applications can be sent electronically to AngelInvestment@illinois.gov.
Available Tax Credits (per calendar year)
2016: $0 (updated as of 8/4/2016)
January & February Snapshot
July & August Snapshot
***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 associated rulemaking, please follow the links below:
Illinois Angel Investment Public Act 097-1097