Angel Investment Tax Credit


Now Accepting Qualified Investment Applications for 2016

Encouraging Capital Investments in Kentucky Small Businesses

The Cabinet for Economic Development understands that investment in Kentucky small businesses is crucial to the economic welfare of the Commonwealth. To encourage business growth and job creation, the Kentucky Angel Investment Fund Tax Credit allows angel investors – people who provide capital for startup companies – to receive tax credits. Qualified investors can receive a tax credit of up to 50 percent of their investment in counties with high unemployment rates, or enhanced counties, and 40 percent in all other counties.

The purpose of the Kentucky Angel Investment Tax Credit program is to encourage qualified individual investors to make capital investments in Kentucky small businesses, create additional jobs, and promote the development of new products and technologies. Qualified individual investors making qualified investments in qualified small businesses may be eligible for incentives in this program. The Commonwealth, through KEDFA, allocates the credits to qualified investors.

The Cabinet does not provide financial screening of the companies or individuals involved in the program and limits its certification to the statutory parameters for a Qualified Investor, Qualified Small Business and Qualified Investment per KRS 154.20-230 through 240. Cabinet staff will not perform due diligence on the small businesses and cannot guarantee any return on investment.

 

Key Guidelines:

  • A Qualified Small Business is a legal entity registered and in good standing with the Kentucky Secretary of State and has no more than 100 full-time employees.
  • The business must be engaged in Bioscience; Environmental and energy technology; Health and human development; Information technology and communications; Materials science and advanced manufacturing; or Other new economy knowledge based activity.
  • A Qualified Investor holds no more than twenty percent (20%) ownership in and is not employed by the Qualified Small Business prior to making a Qualified Investment in that business.
  • A Qualified Investment is a minimum cash investment of $10,000 made by a Qualified Investor in a Qualified Small Business.
  • Tax credits may be transferred to an individual tax payer and can be carried forward for up to 15 years.

 

Please refer to the fact sheet and application forms below for additional information on
qualifying criteria.