What is the Angel Investor Credit?
This tax credit is available to angel investors making a cash investment of no less than $25,000 in the qualified securities of a Connecticut business. The credit is applicable to taxable years beginning on or after January 1, 2010. The allowable credit is 25% of the cash investment and cannot exceed $500,000.
The credit must be claimed in the taxable year in which the investment is made. Any tax credit claimed but not applied against the income tax liability may be carried forward for up to five years or until the full credit has been applied. The tax credit is administered by Connecticut Innovations, Inc. If you qualify for this credit, you should receive a certification letter from Connecticut Innovations, Inc.
The tax credit may be claimed by the shareholders or partners of an S corporation or an entity treated as a partnership for federal income tax purposes. If the entity is a single member limited liability company that is disregarded as an entity separate from its owner, the tax credit may be claimed by the limited liability company owner provided the owner is a person subject to Connecticut income tax.
Additionally, an angel investor can continue to seek this tax credit through Connecticut Innovations, Inc. until June 30, 2019. Tax credits cannot be reserved for any investments made on or after July 1, 2019.
Effective for taxable years beginning on or after January 1, 2016, an angel investor may sell, assign, or transfer all or part of the Angel Investor Tax Credit to another taxpayer one time.