InvestOhio — Ohio Small Business Investment Tax Credit
Ohio Department of Development
10% of investment
Researched for this program: 6 rejection traps · 5 required documentsWhat decides this award ↓
10% credit for Ohio equity investors
InvestOhio is a nonrefundable Ohio personal income tax credit equal to 10% of new equity (cash) an investor puts into an eligible Ohio small business to acquire an ownership interest. The investor must hold the ownership interest for a five-year holding period before the credit can be claimed, and the small business must reinvest the proceeds in Ohio property, payroll, or other qualifying assets within six months. Both the small business and the investor register through the Ohio Business Gateway, and credits are issued on a first-come, first-served basis within each fiscal biennium. The credit is a natural fit for founders raising friends-and-family or angel rounds, and for the angels themselves, because it directly rewards Ohio equity investment regardless of industry.
- Funding type
- Tax credit
- Level
- State
- Amount range
- 10% of investment
- Realistic amount
- A typical angel or friends-and-family investor putting $50,000–$250,000 of new equity into an Ohio startup earns a $5,000–$25,000 credit. Larger backers investing $500,000–$1,000,000 earn $50,000–$100,000. Few individuals reach the $1 million credit ceiling (which requires a $10 million investment).
- Deadline
- Rolling — investor and small business register through the Ohio Business Gateway each biennium; credits issued first-come, first-served until the biennial allocation is exhausted.
- Status
- active
- States
- Ohio
- Payment model
- tax-credit-offset
Who qualifies
- Investor must make a new cash equity investment to acquire an ownership interest in an eligible Ohio small business enterprise
- Small business must have total assets of $50 million or less, OR annual sales of $10 million or less
- Small business must have at least 50 Ohio-based employees, OR employ more than half of its total employees in Ohio
- Investor must retain the ownership interest for a five-year holding period before claiming the credit
- Small business must reinvest the investment proceeds in qualifying Ohio property or payroll within six months of the investment
- Both the small business and the investor must register through the Ohio Business Gateway
How to apply
-
1
Small business registers on the Ohio Business Gateway
The eligible Ohio small business creates an InvestOhio profile on the Ohio Business Gateway and receives a small business identification number it shares with prospective investors.
~2 hrs
-
2
Investor registers and links to the investment
The investor registers on the Ohio Business Gateway, references the small business ID, and requests a credit certificate before or at the time of making the qualifying cash equity investment.
~2 hrs
-
3
Make the investment and reinvest proceeds
The investor makes the new cash equity investment; the small business must reinvest the proceeds in qualifying Ohio property, payroll, or other allowable assets within six months.
~1 hrs
-
4
Hold for five years, then claim the credit
After completing the five-year holding period, the investor claims the nonrefundable credit on the Ohio personal income tax return for the year that includes the end of the holding period. Unused credit carries forward up to seven years.
~2 hrs
The credit is captured by the investor, not the business — but a founder can make their Ohio raise materially more attractive by registering the company on the Ohio Business Gateway first and handing prospective angels the small business ID so they can lock in a credit certificate before wiring funds. The five-year holding period and the six-month reinvestment requirement are the two rules that trip people up; align the cap table and the use-of-proceeds plan to both before closing.
Deadline & timing
Registration and credit certificate requests are made through the Ohio Business Gateway. Credits are allocated on a first-come, first-served basis within each two-year fiscal biennium. Because the program has a biennial credit pool, registering early in a biennium improves the odds of securing an allocation.
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