A significant benefit of being an Angel is the State of New Mexico Angel Investment Tax Credit (AITC). This program is now administered by NM Tax and Revenue Department (NM TRD).
It allows for a New Mexico accredited investor (you must file a NM income tax return) to take a tax credit (not a refund) of 25% of their investment, up to $62,500 per investment, for five investments per taxable year, on qualified angel investments (see requirements detailed below). Unused portion of the credit can be carried forward for five years.
- Credit can only be claimed on one qualified investment per company per round in the investment year
- Credit is non-refundable
- Carry-forward period is 5 years
- Claims will be approved on a first-come, first-served basis. If the total application in a year exceeds the $2 million cap, unpaid claims will be granted priority for the following year
- Bill sunsets December 31, 2024
- Company applies for the credit. NM Tax and Revenue Form trd-41404. Company is approved for credit.
- Investor applies for their credit based upon the company’s offering, using the same form NM TRD 41-404
Contact the NM Tax and Revenue Department, administrators of the Tax Credit
(They are good humans, so reach out).
- Have your signed offering documents on hand
- Keep a record of your transaction (wire, ACH confirmation or copy of the check)
- Specify your dates of investment
The company must apply first!
The company should provide you with the needed information.
For qualifying investments, complete the Angel Investor Credit Claim form, NM Tax and Revenue Form trd-41404
You must apply first. This process can take a long time.
If your company fits criteria for your investment offering, complete the application, form provided above.
Criteria to qualify – see Section K #5 and #6 of HB 002 Below
- Majority of employees and majority of investment in New Mexico
- Company engaged in “qualified research” as defined in Section 41 of the Internal Revenue Code and/or manufacturing