Connecticut offers an Angel Investor Tax Credit Program, which is administered through Connecticut Innovations to encourage accredited angel investors to support local startups that are Qualified Connecticut Business. To qualify for the tax credit a accredited investor or network of accredited investors must invest at least $25,000 or up to a capped investment of $2 million. If the investment, investor, and business qualify for the tax credit the investor will receive a tax credit of 25% of the investment to take against their Connecticut state income tax. To apply for the tax credit the investor must apply and receive a tax credit reservation number before making the investment.
Non-Qualifying Investors
- venture capitalists;
- banks;
- savings and loan associations;
- trust companies;
- insurance companies and similar entities whose business activities include venture capital investments;
- people who control 50% or more of the qualified business that’s receiving the investment.
Qualifying Business
- All industry verticals qualify for any Connecticut business;
- Gross revenues of less than $1 million in the most recent income year;
- Fewer than 25 employees (including shareholders, members or active partners), at least 75% of whom are Connecticut residents;
- Operated in Connecticut for fewer than seven consecutive years;
- Received less than $2 million in eligible investments from angel investors.
How do I apply for the Connecticut Angel Investor Tax Credit Program?
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.
