About this programme
The Illinois Angel Investment Tax Credit Program gives investors a state tax credit for putting money into early-stage Illinois companies. The Illinois Department of Commerce and Economic Opportunity (DCEO) runs it, and the goal, in the state's own words, is to encourage investment in innovative, early-stage companies so they can get the working capital they need to grow in Illinois.
The credit does not go to the company. It goes to the investor, once the company the investor backed has been certified as a Qualified New Business Venture (QNBV). A company applies for that certification first; investors then apply separately to claim the credit once they have made a qualifying investment in a certified QNBV.
There is a hard annual cap on how much credit the state will issue: $15 million a year, released in quarterly chunks and awarded first-come, first-served. Once a quarter's allocation is used up, no more credits are issued until the next quarter opens.
How it works
Investors get a credit worth 25% of their investment in a standard QNBV, or 35% if the company qualifies as a Set-Aside QNBV (minority-owned, women-owned, disability-owned, or based in a rural county). The credit is capped at $2 million of investment per single QNBV.
Investments must be at least $10,000 and no more than $2,000,000 per QNBV, must be equity-based and at-risk, and must be made on or after the company's QNBV certification date. Investors must hold the investment for at least 3 years and file an annual attestation within 30 days of each anniversary for years 1, 2 and 3.
SAFE agreements can qualify if they include specific mandatory and unconditional conversion clauses (automatic conversion within 3 years); DCEO publishes the acceptable clause language.
If a taxpayer's credit exceeds their Illinois income tax liability for the year, the unused portion can be carried forward for up to 5 years. Credits cannot be sold or transferred.
DCEO releases the $15 million annual allocation quarterly; consult the current year's allocation schedule for the exact quarterly cutoffs.
Who can apply
For a company to be certified as a QNBV: its principal place of business must be in Illinois, it must be in good standing with the Illinois Secretary of State, at least 51% of its employees must be in Illinois, and it must show potential for job growth or increased capital investment.
The company must be engaged in innovation within a qualifying sector, or in pre-commercialization activity around proprietary technology, and must not be principally engaged in a disqualifying sector.
It must have fewer than 100 employees, have operated in Illinois for 10 consecutive years or fewer, have received no more than $10 million in aggregate investment to date, and have received no more than $4 million in tax-credit-qualified investment.
To keep the certification's benefits intact, the company must maintain 51% Illinois employment, or keep its principal place of business in Illinois, for 3 years from the date of its last tax credit certificate.
For investors: the investment must be $10,000 to $2,000,000 per QNBV, equity-based and at-risk, made on or after the company's certification date, and held for a minimum of 3 years with proof of fund transfer (a cancelled check or wire documentation).
How to apply
- Company: submit the QNBV Application through DCEO's online form.
- Company: the QNBV Review Committee meets every other Thursday to review applications; check the year's QNBV Committee schedule for expected decision timing.
- Company: if approved, the business is certified as a QNBV for that calendar year and must re-register annually to keep the certification.
- Investor: confirm the target company currently holds QNBV certification before investing.
- Investor: make the equity investment (between $10,000 and $2,000,000 in that QNBV).
- Investor: submit the Investor Claimant Application through DCEO's online form, with proof of fund transfer, and a Trust Identification and Disclosure Form if a trust is the investing vehicle.
- Investor: file the Investor Claimant Annual Attestation of Investment within 30 days before each of the first, second and third anniversaries of the investment.
- Investor: claim the credit on the Illinois state tax return.
Documents you’ll typically need
- QNBV Application (online form, for the company)
- Investor Claimant Application (online form, for the investor)
- Proof of fund transfer (cancelled check or wire documentation)
- Trust Identification and Disclosure Form, if investing through a trust
- Investor Claimant Annual Attestation of Investment, filed in years 1 through 3
- QNBV Annual Report
Frequently asked
Does the company or the investor get the tax credit?
The investor gets it. The company only needs to become a certified Qualified New Business Venture (QNBV); its investors then apply separately to claim the credit.
How much of my investment can I get back as a credit?
25% of the investment for a standard QNBV, or 35% if the company qualifies under DCEO's Set-Aside categories (minority-, women-, or disability-owned, or based in a rural county), up to $2 million of investment per QNBV.
What happens if the credit is bigger than my Illinois tax bill?
You can carry the unused portion forward for up to 5 years. The credit cannot be sold or transferred to someone else.
Is there a minimum holding period?
Yes. Investors must hold the investment for at least 3 years and file an attestation within 30 days before each of the first three anniversaries.
What if the $15 million annual allocation runs out?
Credits are released quarterly on a first-come, first-served basis. Once a quarter's allocation is exhausted, no more credits are issued until the next quarter opens.
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Reviewed 2026-09-25. Programmes change, so check eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private firm and is not part of any government body.