Angel Tax Credit
To qualify for the Angel Tax Credit, investors must meet the following general criteria. They must:
- Be a natural person
- Be an accredited investor per SEC Reg. D
- Be a non-accredited investor investing in exempt filings per Minn. Stat. 80A.46 (13) or (14) or Minn. Stat. 80A.50 (b)
- Not receive more than 50 percent of their annual gross income from the business
- Be certified by DEED before investment is made. Non-accredited investors making exempt transactions may file for certification within 30 days of making investment. There is a non-refundable certification filing fee of $350
- Make a minimum qualifying investment of $10,000. Three or more investors may join to create a fund. Funds have a minimum investment of $30,000, which may be divided among investors as the fund wishes.
Application Procedures for Investors
Applying for the Angel Tax Credit is a four-step process; step 5 is an annual reporting requirement. Please note that steps 1-3 must be approved before the investment is made.
Step One - Before submitting an application, investors should complete the following certification checklist to self-determine whether they might qualify for the Angel Tax Credit Program. Do not submit this checklist with the certification application.
Step Two - Complete and submit a certification application along with the $350 filing fee. The fee is nonrefundable. Certification approval notification is done by email within 30 days, though our usual turnaround time is about two weeks. Consultants who are acting on behalf of an investor and who wish to discuss the application with DEED must first submit a Power of Attorney form. Current year certifications expire on December 31.
Step Three - After certification, the investor and the qualified business jointly complete the Credit Allocation Application form and submit to DEED. Allocation approval is done by email within 15 days, though our usual turnaround time is about 4-5 days. Once approved, the investment transaction must be completed within 60 days or by December 31, whichever is sooner.
Step Four - Within 15 days of completion of the investment transaction, the business must provide DEED with proof the investment was made; investors should ensure the business does this. Proof approval is done by e-mail within 15 days.
The following documentation must be submitted with the attached form:
- A copy of the investor’s or fund’s wire transfer or check made out to the business
- A copy of the business’ deposit receipt or bank statement showing the deposit(s) made
- A copy of the underlying transaction document (e.g., a signed investor/subscription agreement)
Step Five - By February 1 of each year, investors that have made investments pursuant to the program must file an annual report with DEED. Investor annual reports must be filed for three years from the year the investment was made.
The annual report filing fee is $100. There is a fine of $500 for failure to file the required annual report by the February 1st deadline. Investors must hold the investment for three years, unless:
- The investment becomes worthless
- At least 80 percent of the business’ assets are sold
- The business is sold
- The business goes public
The Angel Tax Credit is revoked and must be repaid if an investor fails to meet the three- year holding period.
Lists of Certified Businesses, Investors, Funds and Credits Issued
Select from the links below to view, download and print lists of businesses, investors and funds that have been certified to receive Angel Tax credits and the list of credits issued. The documents are updated regularly.
For More Information
Email Angel.Credit@state.mn.us or contact:
Jeff Nelson, Program Coordinator, at email@example.com or 651-259-7523
Kim Ann, Program Administrator, at firstname.lastname@example.org or 651-259-7434