Recently we’ve been telling you about Ohio’s new nonrefundable tax credit program called InvestOhio. Through it, Ohio taxpayers who invest in qualifying Ohio small businesses can qualify for a 10 percent credit against their personal Ohio income tax if they meet certain requirements. In less than two weeks, taxpayers can begin the second step in the application process for this tax credit.
The first phase of the program began the week of November 14. At that time, the state began accepting initial applications from investors, as well as the companies they will be investing in, on the Ohio Business Gateway website. Both entities are required to provide some basic information to the state so that each can be assigned an identification number. Both the investor AND the qualifying small business are required to complete this first step of the process.
Beginning the week of December 5, one of the two parties – an investor OR the company – must complete a second filing on the Ohio Business Gateway. This second filing sets the taxpayer’s place in line to receive his or her portion of the $100 million in tax credits that is being made available during the two-year period ending June 30, 2013.
Since the credit is available to taxpayers on a first-come, first-served basis, no one knows how soon the credit will be exhausted – so if you’re thinking about applying for the credit, you’ll want to apply sooner rather than later.
Although you can complete the application process on your own, the application does require several steps, and you’ll need to ensure that both you and the company you plan to invest in qualify for the tax credit. Your tax professional can assist you with the application process and help ensure that you have followed all the steps properly.
InvestOhio is tax credit program available to individuals who pay Ohio personal income tax, who make an equity investment in a qualifying Ohio business, and the business in turn invests that same amount in Ohio based equipment, property or wages. The taxpayer must hold the investment for two years to qualify for the credit, after which he or she will receive a 10 percent nonrefundable income tax credit. The business must similarly retain the property it purchased from the cash infusion for the entire two year holding period.
The InvestOhio program is being administered by the Ohio Department of Development in collaboration with the Ohio Department of Taxation. It is expected to generate at least $1 billion in new private investment in Ohio small businesses by 2013.
For additional information, please visit http://www.development.ohio.gov/InvestOhio/InvestOhio.htm or view this Frequently Asked Questions PDF http://www.development.ohio.gov/InvestOhio/Documents/InvestOhioFAQ110411.pdf.