Eliminate Angel Investment Tax Credit Cap

The 2013-15 state budget eliminates the $47.5 million cap on the maximum amount of angel investment tax credits that the Wisconsin Economic Development Corporation (WEDC) can allocate.

The angel investment tax credit equals 25% of a claimant’s bona fide angel investment made directly in a qualified new business venture (QNBV) certified by WEDC.  The credit is claimed on the individual income tax.

There is a $20 million maximum aggregate amount of angel investment credits that can be claimed in one year, plus an additional $250,000 for tax credits claimed for nanotechnology investments.

About $36 million in angel investment tax credits have been claimed since 2005.  The state would likely have hit the $47.5 million cap in 2014 without having it removed.

WEDC also offers early stage seed investment tax credits, which are equal to 25% of a claimant’s investment paid in one year to a certified investment manager who invests in a QNBV certified by WEDC.  This credit can be claimed on the individual income, corporate income and franchise, and insurance premium taxes.

A cap on the maximum amount of early stage seed investment tax credits was eliminated in early 2009 as part of a budget repair bill.