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Illinois Angel Investment Credit Program

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PROGRAM ALERT:

The 2018 Angel Investment Tax Credit Program Investor application is now available.  Please see Investor applications and forms section below.

Please note: Due to the high volume of application submissions, notification of approvals will not occur until Friday, May 18, 2018 at the earliest. We appreciate your patience as we work to process your application.​


 

The Illinois Angel Investment Tax 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.  Tax credits are allocated on a quarterly basis throughout the year and are awarded on a first-come, first-served basis. Please see the Allocation Schedule document below for more information. 

 

PROGRAM DOCUMENTS

 

2018 APPROVED QUALIFIED NEW BUSINESS VENTURES 

 2018 Approved QNBV Listing April 6 2018.pdf

 

BUSINESSES

Businesses must register for each taxable year in which they desire to be a qualified new business venture (QNBV).  All previously certified QNBV's MUST apply as a new applicant for the 2018 program. Businesses seeking eligibility with the program must satisfy the following requirements:

  1. The QNBV must be principally engaged in innovation.

  2. The QNBV must have fewer than 100 employees upon submitting application.

  3. At least 51% of QNBV employees must be located in Illinois.

  4. The QNBV principal place of business must be in Illinois.

  5. The QNBV must have been in operation in Illinois for no more than 10 consecutive years prior to certification.

  6. The QNBV must have the potential to create jobs or capital investments, or both.

  7. The QNBV cannot have received more than $10 million in aggregate private equity investments, or $4 million in investments that qualified for tax credits.

  8. The QNBV must be registered in good standing with the Illinois Secretary of State’s Office to transact business in Illinois.

  9. If approved and an investment into a QNBV business results in the issuance of a tax credit, the QNBV is required to submit an annual report for three years following the issue date of tax credit;

 

QNBV Assigned Reserves

The 2018 Angel legislation created two assigned reserves.  The Registration Notice provided to each QNBV upon certification indicates which, if any, reserve eligibilities apply.

  1. $500,000 in tax credits are reserved for investments made in QNBVs which are “minority owned businesses", "$500,000 in tax credits are reserved for investments made in QNBVs which are “minority owned businesses", "women owned businesses", or "businesses owned by a person with a disability." The legislation specifies that these terms be defined as they are used in the Business Enterprise for Minorities, owned businesses", or "businesses owned by a person with a disability." The legislation specifies that these terms be defined as they are used in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.  More information on that Act can be found at http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=550&. 

  2. $500,000 in tax credits are reserved for investments made in QNBVs with their principal place of business in counties with a population of not more than 250,000. 

 

Business application and forms:

  

INVESTORS

The Illinois Angel Investment Tax Credit Program 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.  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. 

Angel investors must adhere to the following requirements:

  1. Investments must be made in a registered qualified new business venture (QNBV). Investments occurring prior to a business’s 2018 certification with the Angel program are ineligible to receive a tax credit.

  2. Investments must be given at a risk of loss and in consideration for an equity interest of the QNBV. For the purposes of this definition, an investment is at risk of loss if its repayment depends entirely upon the success of the business operations of the qualified new business venture.

  3. The maximum investment amount used toward a tax credit is $2,000,000 per investment.

  4. Investments must remain in the QNBV 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.

  5. Tax credits cannot be sold or otherwise transferred to another person or entity.

  6. 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.  The Department may accepted SAFEs as an eligible investment if the agreement has certain provisions that keep a SAFE investor in more or less the same position as a non-SAFE equity investor in terms of risk exposure. An example of an approved a SAFE "Investor applications and forms."

  7. Investors must submit proof that funds were transferred to QNBV, 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:

 

TAX INCENTIVE ALLOCATIONS

A total of $10 million in Angel Investment tax credits will be allocated in 2018.  Funds will be allocated by quarter, on a first-come first-served basis (see Allocation Schedule, under Program Documents above).  Once tax incentive funding for a particular quarter is exhausted, no further funds can be allocated until the subsequent quarter. 

   

Directions for application upload: 

  1. Go to https://filet.illinois.gov/filet/pimupload.asp

  2. In “Recipient Email Addresses” enter angelinvestment@illinois.gov

  3. Enter your email address

  4. Select the application files to transfer

  5. In “File Transfer Email Subject” enter ANGEL INVESTMENT APPLICATION

  6. Check the required disclaimer and click SEND IT

The Illinois Department of Commerce and Economic Opportunity is committed to protecting the identity of program users.   This secure submission process is designed to protect social security numbers from unauthorized disclosure in compliance with the Illinois Identity Protection Act. 

  

QUESTIONS

Questions regarding the Angel Investment Tax Credit program can be sent to angelInvestment@illinois.gov.

 2018 Angel Allocation Schedule May 11.pdf2018 Angel Allocation Schedule May 11.pdf