Kansas Accredited Angel Investors

Accredited Angels Investors who make a qualified investment into an approved Kansas Qualifying Company may be eligible to receive a transferable Kansas Income Tax Credit for their investment.

Credit limits:

• Up to 50% of the qualifying investment
• No more than $100,000 in tax credit can be issued to an investor per company per year
• No more than $350,000 in tax credit per calendar year.
• Credits can only be issued to a natural person they can not be issued to a permitted entity

Investor Types

Angel Investor – an accredited investor who is a natural person or an owner of a permitted entity investor, who is of high net worth, as defined in 17 C.F.R. § 230.501(a) and who seeks high returns through private investments in start-up companies and may seek active involvement in business, such as consulting and mentoring the entrepreneur. 

• Investment through Individual (Natural Person) Investor:
  • An Investor Summary table submitted by Qualified Kansas Business
  • Include for each investor — name, amount of investment, and amount of tax credits requested.
  • Copy of cleared check/wire from investor into Qualified Kansas Business.
  • Copy of subscription/purchase agreement, signed by company and investor.

Permitted Entity Investor – (A) any revocable trust, general partnership, limited partnership, corporation that has in effect a valid election to be taxed as an S corporation under the United States internal revenue code, or a limited liability company that has elected to be taxed as a partnership under the United States internal revenue code and (B) that was established and is operated for the sole purpose of making investments in other entities 

• Investment through a qualified Permitted Entity Investor:

Note: Tax credits will be issued only to individual (natural persons) Owners of a Permitted Entity. Investment must be directly from Permitted Entity to Qualified Kansas Business. Investment through multiple Permitted Entities (e.g. LLC-1 to LLC-2 to Qualified Kansas business or Trust to LLC to Qualified Kansas Business) will not be eligible for tax credits.

• Copy of the Permitted Entity’s operating agreement documenting that it is operated for the sole purpose of making investments in other entities.
  • Copy of the capitalization table of the Permitted Entity.
  • Copy of the individual investor’s check/wire into the Permitted Entity.
  • Copy of the Permitted Entity’s cleared check/wire into the Qualified Kansas Business.
  • All Owners of the permitted entity must register as an accredited investor

Investors who are not eligible for Tax Credits:

A person who serves in the business as a/an:

• Executive
• Officer
• Employee
• Vendor
• Independent Contractor