About this programme
The Kentucky Angel Investment Act Tax Credit is administered by the Kentucky Economic Development Finance Authority (KEDFA), which allocates the credits to qualified investors on behalf of the Commonwealth. It is built to encourage qualified individual investors to put capital into Kentucky small businesses, create additional jobs, and promote the development of new products and technologies.
Like other state angel tax credits, the incentive is paid to the investor, not the company, so the practical effect for a founder is that it makes local angel money more attractive to raise. The Cabinet does not screen the financial health of the companies or individuals in the program and cannot guarantee any return on investment.
How it works
The credit is worth up to 40% of the investment in high-unemployment or Heritage Counties, and 25% in all other counties.
Credits may be transferred and can be carried forward for up to 15 years.
Applications for 2026 participation are accepted on or after December 12, 2025, and cover two separate application types: the business's Qualified Small Business Application (which requires annual renewal) and a separate Qualified Investment/Investor Application for each planned investment.
Who can apply
The business must be registered and in good standing with the Kentucky Secretary of State, employ no more than 100 full-time employees, and operate in bioscience, environmental or energy technology, health or human development, information technology or communications, materials science or advanced manufacturing, or another knowledge-based activity.
The investor cannot hold more than 20% ownership of the business and must not have been employed by the business before investing.
The minimum qualifying cash investment is $10,000.
How to apply
- The business submits a Qualified Small Business Application, which must be renewed annually.
- For each planned investment, the investor (or the business on the investor's behalf) submits a separate Qualified Investment/Investor Application.
- Applications for the 2026 program year are accepted starting December 12, 2025.
Frequently asked
How large is the tax credit?
Up to 40% of the investment in high-unemployment or Heritage Counties, or 25% in all other Kentucky counties.
What's the minimum investment to qualify?
$10,000 in cash.
Can an investor who already works at the company use this credit?
No. The investor must not have been employed by the business before making the investment, and cannot hold more than 20% ownership.
Does the state vet the investment for me?
No. The Cabinet does not provide financial screening of the companies or individuals involved and cannot guarantee any return on investment.
What happens if the credit is bigger than the investor's tax bill?
Credits can be carried forward for up to 15 years and may also be transferred.
When do 2026 applications open?
On or after December 12, 2025.
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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.