Minnesota Angel Tax Credit Program Receives New Funding Boost in 2023 Tax Bill

Minnesota Angel Tax Credit Program Receives New Funding Boost in 2023 Tax Bill

We are thrilled to share some exciting news for entrepreneurs and startups in Minnesota. The recently signed 2023 tax bill by Governor Walz includes a substantial increase in funding for the Minnesota Angel Tax Credit program. This boost of $5 million in funding for each of 2023 and 2024 signifies a remarkable opportunity for businesses in the state. At Avisen Legal, we understand the importance of staying informed about programs that can benefit your business or your investment opportunities, which is why we are here to guide you through the details and implications of the Minnesota Angel Tax Credit program. 

Overview of the Minnesota Angel Tax Credit Program 

Before delving into the recent funding boost, it’s important to understand the foundational aspects of the Minnesota Angel Tax Credit program. Designed to encourage impact investment in startups and early-stage companies, the program is specifically geared towards high technology, new proprietary technology, or new proprietary products, processes, or services in specified fields. 

Minnesota’s Angel Tax Credit provides a 25% credit to investors or investment funds that make equity investments in startup companies focused on high technology, new proprietary technology, or a new proprietary product, process, or service in specified fields. The maximum credit is $125,000 per person, per year ($250,000 if filing jointly). The credit is refundable and serves as a powerful incentive for investors to actively support the growth and development of promising ventures in Minnesota. 

The program is structured to foster innovation, boost economic growth, and attract capital from various sources, including residents of other states and foreign countries. This inclusiveness expands the pool of potential investors, enhancing opportunities for businesses in Minnesota to secure vital funding. 

Eligibility for the tax credits entails certain criteria, including the business being headquartered in Minnesota and engaging in specific industries. It is noteworthy that this program not only benefits businesses seeking funding but also offers advantages to investors who are looking to support emerging companies while receiving attractive tax benefits in return. 

The 2023 Tax Bill and the New Funding Allocation 

The recent tax bill signed by Governor Walz has injected new life into the Minnesota Angel Tax Credit program. The inclusion of $5 million of additional funding for each of 2023 and 2024 demonstrates the state’s commitment to fostering innovation and entrepreneurship. This boost in funding presents a unique opportunity for startups and early-stage companies in Minnesota to attract investors and secure the capital necessary for growth. 

Furthermore, the DEED will begin accepting applications on May 30th, enabling businesses to take advantage of this enhanced funding right away. This prompt action by the DEED demonstrates the state’s dedication to supporting and catalyzing the local business ecosystem. 

Reserved Funding for Outstate and Women/Minority-Owned Ventures 

In line with the state’s commitment to diversity and inclusivity, half of the newly allocated funding will be reserved until October 1, with priority given to outstate businesses and women/minority-owned ventures. This reservation ensures that businesses outside of the Twin Cities metropolitan area and those owned by women and minorities have a fair chance to benefit from the program. 

By setting aside a portion of the funding specifically for these ventures, Minnesota is promoting economic growth in regions beyond the major urban centers and fostering a business environment that values diversity and equality. Entrepreneurs and businesses falling into these categories should act promptly to seize this incredible opportunity for funding and support. 

Transition of Reserved Funding into the General Pool 

On October 1, any remaining portion of the reserved funding will become part of the general pool, available to all qualifying Minnesota businesses. This transition ensures that no funding goes to waste and provides an opportunity for a wider range of businesses to access the tax credits. 

As the reserved funding merges with the general pool, the competition for tax credits may intensify. Therefore, it is crucial for entrepreneurs and startups to be prepared and proactive in their approach. Seeking professional legal advice, such as that offered by Avisen Legal, can help you navigate the program’s intricacies and increase your chances of securing the tax credits your business needs to thrive. 

Benefits and Opportunities for Entrepreneurs and Startups 

The increased funding for the Minnesota Angel Tax Credit program brings forth numerous benefits and opportunities for entrepreneurs and startups in the state. By attracting angel investors through the tax credit incentives, businesses can gain access to vital funding sources that can drive innovation, scale operations, and expand market reach. 

These tax credits not only provide financial support but also serve as a validation of your business model, making it more appealing to potential investors. Additionally, by participating in the program, you become part of a broader network of like-minded individuals and organizations focused on promoting entrepreneurial success in Minnesota. 

The recent approval of new funding for the Minnesota Angel Tax Credit program heralds an exciting era for entrepreneurs and startups in the state. By leveraging this program, businesses can attract investors, secure vital funding, and drive innovation and growth. We encourage you to seize this opportunity and stay informed about the reopening of the program by the DEED. Consider reaching out to Avisen Legal for comprehensive legal guidance and support throughout your journey. 

Remember, success often lies in staying ahead of the curve, and with the increased funding for the Minnesota Angel Tax Credit program, now is the time to take your business to new heights. 

Let Avisen Legal Assist You 

At Avisen Legal, we understand the complexities of business law and the significance of making informed decisions. Our team of experienced attorneys has a wealth of experience in corporate transactions, venture capital, and tax law. We are here to guide you through the Minnesota Angel Tax Credit program, ensuring you understand the eligibility requirements, application process, and legal considerations involved. 

Whether you are seeking legal advice to maximize your chances of securing tax credits or need assistance with other business law matters, Avisen Legal is committed to providing you with the expertise and support you need to succeed. Contact us today to learn more. 

Print Friendly, PDF & Email
Jeffrey Robbins

Jeffrey Robbins

For over 35 years, I have represented entrepreneurs who start and grow technology-based enterprises and angel and venture investors who target those companies. Clients seek my assistance in strategic business plan development; entity selection and formation; private and public fundraising (including crowdfunding) and securities law compliance; employment and compensation plans and agreements; and merger and acquisition activities. Read Jeff's Bio.

Related Posts