Cabinet for Economic Development
Kentucky Angel Investment Tax Credit Funds are Going Fast
Investors already approved for two-thirds of the money allotted for the Kentucky Angel Investment Tax Credit
FRANKFORT, Ky. (March 9, 2015) – The Kentucky Angel Investment Tax Credit is a hit among investors. Because of the strong interest, investors wanting to apply should act soon because of the limited funds still available.
In the program’s first two months, 64 angel investors – people who provide capital for startup companies – announced plans to invest $5.4 million in 17 Kentucky businesses. As a result, those investors are eligible for $2.1 million in angel investment tax credits after making their approved investments. That’s more than two-thirds of the state’s allotted angel tax credits for all of 2015.
“The response to the Kentucky Angel Investment Tax Credit has been astounding,” said Mandy Lambert, commissioner of business development in the Kentucky Cabinet for Economic Development. “At this rate, we anticipate the funds allotted for the entire year will be awarded in the very near future, so I would encourage any interested investors to apply quickly. It’s exciting to see so many investors supporting Kentucky’s new enterprises.”
Last year, Gov. Beshear signed legislation allowing individual angel investors to receive tax credits. Previously, only groups of angel investors (with fund managers) could take advantage of the credits.
Individual angel investors can receive a tax credit of up to half of their investment in counties with high unemployment rates, or enhanced counties, and 40 percent in all other counties. Approved investors can claim the credits on their 2015 tax returns.
Out-of-state investors are taking advantage of the credit, too. Though out-of-state investors may not have any Kentucky tax liability, they can transfer that tax credit to someone else within the Commonwealth. If an individual Kentucky taxpayer is willing to purchase the credit, the investor will recover some portion of the investment.
The expansion is designed to encourage more investment in Kentucky’s small businesses. The credit, in turn, is expected to spark more innovation, business creation and jobs.
The angel tax credit is operated through the Office of Entrepreneurship within the Kentucky Cabinet for Economic Development. Additional program information, including application forms, is available at www.thinkkentucky.com/kaitc.