The state of Ohio is offering a generous, non-refundable tax credit for eligible and qualified taxpayers called InvestOhio. Ohio has recognized that investment in small businesses and job creation are primary drivers of economic growth in the state, and have rolled out this tax credit to promote these economic initiatives. By acting now and meeting certain requirements, an individual can receive a 10% income tax credit on their Ohio tax return, up to $1 million for single filers, and $2 million for married filing joint returns!
Who is Eligible for InvestOhio
This tax credit is designed for investors of Ohio small businesses. The definition of an Ohio small business is: 1) assets less than $50 million or sales less than $10 million and 2) 50 full-time employees in Ohio or more than 50% of total employees in Ohio. Additionally, there must be at least one full-time employee in Ohio prior to the investment. After the initial cash investment has been made by the investor into the eligible Ohio small business, there is a 6-month window in which a qualified expenditure must be made. These qualified expenditures range from hiring new Ohio employees, buying new machinery and equipment, or purchasing real or intangible property used in the business.
Necessary Compliance Measures
Simply qualifying for the InvestOhio tax credit is not enough to receive the credit. It is absolutely critical to have administrative compliance with the state in order to receive the tax credit. Several of these aspects include: registering and applying online via the Ohio Business Gateway, submitting proof of investments and expenditures expediently and within the proper timeframe, and submitting interim and final reports with the state. The most critical component of these compliance measures is applying and registering with Ohio before the initial investment is made.
If you are considering this credit, please reach out to your trusted advisor at Apple Growth Partners to learn more. The administrative compliance aspects are tedious in nature, and several steps must be taken before the initial investment is made in order to qualify. AGP can help determine if the tax credit is applicable in your scenario, as well as ensuring that all compliance steps are appropriately taken in order to fully qualify.