Under newly enacted law (PL 2020, Ch. 616), tax credit authority for 2020 was expanded from $5 million dollars to $15 million for the calendar year. Having already awarded $5 million in credits on January 2, 2020, FAME now has the authority to issue up to $10 million in tax credits under the program for eligible investments made in eligible companies ON OR AFTER April 1, 2020. Investments made prior to April 1, 2020 are not eligible, and credits already issued in 2020 for investments made on or about January 2, 2020 will not be adjusted.
Other Important Changes
The new legislation made additional program changes, effective April 1, 2020:
- Credits are now authorized at 40% (down from 50%) of eligible investment;
- The maximum cumulative qualified investment in each company was reduced to $3.5 million dollars (down from $5 million).
- There is now a limit of qualified investment in any one company in any one year of $2 million dollars.
The limits set forth in #2 and #3 above will be applied commencing with applications received on or after April 1, 2020, and will count all investments already made in companies, both cumulatively and earlier in 2020.
Process Updates and Modifications
FAME will begin processing applications on April 1, 2020. While the forms are the same (and available on our website), we have changed our process in light of our offices being closed to the public due to the COVID-19 pandemic.
We are asking that business and investor applications be submitted on paper, with checks, by regular USPS mail or commercial delivery services like FedEx or UPS, as was the normal course pre-pandemic. Importantly, we are also asking that electronic copies of such applications be delivered by email to or . If no electronic copy is provided, we cannot guarantee that it will be timely processed. We are not accepting hand-delivered applications, as our offices are currently closed to the public.
We do not think new credits will be fully utilized on April 1. In fact, we believe that credits will last for several months, if not until the end of the year. However, this is just a good faith estimate based on past administration. Participating companies and prospective investors should check with FAME regularly to monitor the balance of remaining credits during the course of the year.