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New Angel Investor Tax Credits Application Open For Delaware Businesses

The state of Delaware has made strides to keep its business friendly reputation in the country. Recently, House Bill 170 also known as the Angel Investor Job Creation and Innovation Act has opened its application for Delaware based small businesses and investors.

 

“We should do everything we can to support Delaware’s innovators and entrepreneurs who are leading Delaware’s new economy. This legislation would encourage investments in innovative, Delaware-based small  businesses and connect our most talented entrepreneurs with the resources they need to be successful.” – Governor John Carney

 

As stated by the Delaware Government, the Angel Investor Job Creation and Innovation Act would establish a refundable tax credit for qualified investors for Delaware based small businesses. The goal of this tax credit is to spur job creation and innovation within the state. While Wilmington is currently home to 131 businesses, this tax credit is expected to help strengthen economic development opportunities.

 

Think you may be eligible or are interested in starting a business? This is what you need to be eligible:

 

Eligible Businesses:

  • Fewer than 25 employees
  • Been around for no more than 10 years (unless working on FDA approval, then it is up to 20 years)
  • High technology businesses
  • Business  is headquartered in Delaware
  • 51% of the business’ employees are paid in Delaware

 

Other Businesses Requirements:

  • Uses proprietary software to add value to a product or service
  • Research or develop a product or process
  • Will not issue securities on the public exchange or host a liquidation event 180 days after a qualified investment
  • Eligible invested funds must be used for qualified investments, i.e. buying or renting a building in Delaware, copyrights, and payroll for work in Delaware.

 

Qualified Investors:

  • Funding is capped at 5 million annually.
  • The Cumulative Tax Credit Limit is $125,000 individually, $250,000 for couples filing together.
  • No more than $500,000 in credits may be awarded in total throughout all three years.

 

This program will retire in 2021. Investors must invest for three calendar years. Failure to do so will result in the credit being revoked and the credit must be paid back in full. If business fails to maintain employment requirements for 3 years, credit is revoked and must be repaid according to a repayment schedule.  Interested in all of the tax credits Delaware has to offer? Find out more about each of the 10 tax credit opportunities along with grants and different incentive programs on business.delaware.org/incentives.

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