Angel Investor Tax Credit
IEDA Programs
IEDA is not currently accepting tax credit applications from investors for the Angel Investor Tax Credit Program.
After the outstanding waitlist has been awarded (expected after July 1, 2025), IEDA will announce designated filing windows for applications. Applications that are received outside the filing window or exceed the available annual allocation will be denied by the IEDA Board. Please continue to check this page for updates.
Qualifying businesses may still apply for certification as described in "Who Qualifies" below.
Angel Investor Tax Credit Program
The Angel Investor tax credits were created to increase the availability and accessibility of venture capital, particularly for ventures at the seed capital investment stage. Businesses must first obtain Qualifying Business certification before investors can apply.
- Program Cap: Total amount of tax credits available per fiscal year (July 1 - June 30) is $2 million.
- Individual Cap: Investors can receive a maximum of $100,000 in tax credits per calendar year for a household (household includes a person, the person's spouse and/or dependent).
- Business Cap: Investors in any one business can be issued a maximum amount of $500,000 in tax credits per calendar year.
The Angel Investor Tax Credit is:
- Equal to 25% of an investor's equity investment
- Refundable to investors who file personal net income tax
- Not refundable for investors filing corporate income tax, franchise tax, taxes on gross premiums or moneys and credits taxes
Review the full Administrative Rules for more information.
Who Qualifies?
Businesses
To be certified as a Qualifying Business and for its investors to be eligible to receive a tax credit, a business must satisfy all the following criteria at the time for which an investment tax credit is claimed:
- Principal operations located in the state of Iowa
- At least 50% of all employees in Iowa
- At least 50% of the business' total payroll to employees reside in Iowa
- Headquarters is located in Iowa (the headquarters are defined as the home office for substantial amount of executive employees)
- In operation six years or less
- Must be participating in an entrepreneurial assistance program (this requirement may be waived by the IEDA if the business can establish the owner/business has other experience that adequately replaces participation in an entrepreneurial assistance program)
- Cannot be primarily engaged in retail sales, real estate or the provision of health care services or other services requiring a professional license
- Net worth must be less than or equal to $10 million
- Must have secured all of the following at the time of application for tax credits
- At least two investors (with regard to this criterion, an "investor" includes a person who executes a binding investment commitment to a business)
- Total equity financing, binding investment commitments, or some combination thereof, equal to at least $500,000 from investors
Investors
- Must make an investment in a certified Qualifying Business
- Must make Investments in the form of cash for equity
- Must have less than a 70% ownership stake in the Qualifying Business
How Do I Apply?
Businesses interested in applying should contact Lisa Connell.
Businesses
- Submit application and supporting documents for staff review
- IEDA will send the Qualifying Business a certification letter if eligibility criteria is met
- IEDA will provide the Investor Tax Credit form to Qualifying Businesses to send to investors
- Investments will be considered eligible if made within 120 days prior to the submission of the application or at any point thereafter
Investors
- After making an investment in a certified Qualifying Business, submit an application by March 31 of the year following the investment
- Applications will only be accepted during designated periods announced by IEDA
- IEDA anticipates that applications will not be accepted until after July 1, 2025
- If no application period is available before the March 31 deadline for the investment, the investor will not receive a tax credit
- IEDA Board must approve a tax credit award; if approved, IEDA staff issues a tax credit certificate