So far, all the posts in this angel taxes series have been about federal taxes. Some states’ capital gains match the federal treatments; some don’t (being an angel investor in California is much more expensive post-tax than in the Carolinas!).
But today’s post moves us from capital gains and into the realm of state-level angel investment tax credits.
Around 30 states have a state-level tax credit to encourage investments into early stage companies in their state.
This can be a nice additional tax benefit for angel investing. In South Carolina, the credit is easy to apply for, meaningful (it’s a credit for up to 35% of your investment against your SC tax liability), and well used. You can learn a lot more about this credit on other pages on our website, starting here.
To be fair to other assets, there are credits to encourage investment in them – film credits, textile mill renovation credits, abandoned building revitalization credits, … - in many things in SC and beyond – though they tend to be less widely applicable that the angel credit.