Clearly, Minnesotan women are avid entrepreneurs.
In 2013 nearly 38 percent of women statewide were self-employed, according to the U.S. Chamber of Commerce, placing the state in the middle of nationwide statistics at 27th. And the number of such firms is growing: the amount increased 36 percent between 1997 and 2014, while combined revenues grew nearly 61 percent and employment rose 20 percent.
Middle of the pack it may be, but the Gopher State is striving to make its business environment more diverse. In 2009 it instigated the Angel Tax Credit Program, an income tax credit promoting investment in small businesses. For 2017, $5 million of the year’s credits will be reserved for minority or women-owned firms or firms operating in greater Minnesota, in segments including technology, agriculture, forestry, mining, tourism, manufacturing and transportation. Recipients of the credits must have fewer than 25 employees, be younger than 10 years and carry a payroll based mostly in Minnesota.
Essentially, the credit allows for a refund (even if no tax is owed) amounting to 25 percent of any new investment in a qualified business. The maximum credit: $125,000 for individuals, $250,000 for couples filing jointly. Commissioner Katie Clark Sieben of the Minnesota Department of Employment and Economic Development (DEED) calls it “one of Minnesota’s most effective tools for attracting early-stage investments into emerging small businesses.”
Though it’s unclear how many women-owned businesses have taken advantage, through 2016 the overall program has attracted more than $377 million for hundreds of high-tech startup companies.
How to Take Advantage?
- To certify as woman-owned, at least 51 percent of the business or stock must be owned by one or more women, and management/daily business operations must be controlled by one or more women.
- The business must be DEED-certified, but hurry up – the program is set to expire at the end of 2017.
- On your Minnesota tax return, you must complete Schedule M1B, Business and Investment Credits and include a copy of the schedule and certificate.
“We encourage rural, women and minority entrepreneurs to take advantage of this fantastic resource designated to fuel their business growth,” notes Sieben.
Need more information? Contact us at learnmore@BoulayGroup.com or 952.893.9320.
File Download: The Facts on Tax – Minnesota Credit Helps Women-Owned Biz