Tax Update

The Illinois Angel Investment Credit Offers Significant Tax Savings

The Illinois Angel Investment Credit Program is designed to offer a tax credit to interested taxpayers who make an investment in one of Illinois’ qualified new business ventures. The program can offer a tax credit to qualifying taxpayers in an amount equal to 25% of their investment made directly in a qualified new business venture. The maximum amount of an investment that may be used as the basis for a credit under this section is $2 million for each investment 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 five years following the excess credit year.

A business venture desiring to register as a qualified new business must meet the following requirements:

Locate its headquarters in Illinois
Employ at least 51% of its workforce in Illinois
Have the potential for increasing jobs and capital investment in Illinois
Be principally engaged in innovation
Have less than 100 employees at initial time of registration
Be in operation in Illinois for not more than 10 consecutive years prior to the year of certification
Received not more than $10 million in aggregate private equity investment or $4 million in investments that qualify for tax credits

Taxpayers interested in using the tax credit must submit an application to the Illinois Department of Commerce and Economic Opportunity. If the application is approved, the Department provides them with a tax credit certificate. Since the amount of tax credits issued under the Illinois program is capped at $10 million per year, credits are awarded on a first-come, first-serve basis.

The Department of Commerce and Economic Opportunity has a current list of qualified businesses on its website.

For additional information, please contact Steve Madden, CPA, Principal.

Miller Cooper has helped businesses and owners in a variety of buying and selling situations. From due diligence audits of company books and inventory to financial projections, we provide a complete menu of services required for buying or selling a business. We have worked with buyers to provide such services as business plans and projections, due diligence on planned acquisitions and advice on potential sources of funding. We have helped sellers in such areas a preparing a business for sale and structuring a deal. For more information, please contact a Miller Cooper Principal on our M&A team: Steve Madden, Dan Niforatos, Ross Pearlstein, Tad Render or Bill Wiersema.

1751 Lake Cook Road, Suite 400, Deerfield, IL 60015 500 West Madison St., Suite 3350, Chicago, IL 60661

In conformity with U.S. Treasury Department Circular 230 tax advice contained in this communication and any attachments is not intended to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code, nor may any such tax advice be used to promote, market or recommend to any person any transaction or matter that is the subject of this communication and any attachments. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.