Investors will now have more time to claim tax breaks for their investments in startups. This year’s tax package has extended the deadline for the state of New Mexico’s Angel Investment Credit scheme to 2030. Investors can get back up to 25% of their investment, up to a maximum of $62,500, for investments made before 2031.
Angel investors provide capital to start-up companies and help them get started. The tax incentive is intended to encourage investment in New Mexico and stimulate economic growth.
In an opinion piece in July, New Mexico Angels President Drew Tulchin and board member David Perez emphasized that this package of measures would help the state attract and retain more investment in startups over the long term.
‘A package that includes tax incentives, investment capital and technical assistance will help not only attract companies but also keep them here for the long term,’ they wrote.
The Angel Investment Credit scheme was originally set to expire at the end of 2025, but lawmakers have ensured that the deadline has now been extended.
### How it works
The tax reduction is deducted from the investor’s income tax liability. Any unused portion of the loan can be carried forward for five years. Taxpayers may only claim the loan once per investment round and can claim the loan for up to five companies in one tax year.
Investors must apply for the loan within one year of the end of the calendar year in which they made the investment. Companies must also apply before investors can do so.
The total annual volume of angel investment loans is $2 million and is awarded on a first-come, first-served basis. If an investor misses the loan because he or she reaches the annual limit, he or she can reapply the following year.
Businesses and investors may submit applications for the loan to the New Mexico Taxation and Revenue Department using Form TRD-41404.
