The Tennessee Angel Investor Tax Credit is a tax credit against Hall income tax liability available to any angel investor who makes a qualifying investment in a qualifying business.
The tax credit is an amount equal to 33% of the amount of the investment in companies located in a Tier 1, Tier 2, or Tier 3 county.
The tax credit is 50% of the investment amount in companies located in a Tier 4 county.
The incentive tier for each Tennessee county is published on the Tennessee Department of Economic and Community Development’s website. There is a drop-down menu on the right-hand side of the website’s County Profile Tool page under the “Heat Maps” tab that provides this information.
The Tennessee Angel Investor Tax Credit is applicable to the angel investor’s Hall income tax liability for the year in which the qualifying investment is made. The maximum amount of tax credit an angel investor can receive for any tax year is limited to $50,000. Any unused Tennessee Angel Investor Tax Credits can be carried forward for up to five years after the year in which the investment is made. Eligible investments became effective as of January 1, 2017.
Reference: Tenn. Code Ann. § 67-2-125