By Keith Arner, CPA, CVA, Partner
At Hall, Kistler & Company, taxes are always at forefront of what we do, but we realize that for many of our clients, year-end is always a busy time of year with the holidays, your kids’ or grand kids’ school functions, etc. However, this period is also a critical time for year-end tax planning. One area I see that is often overlooked is to take advantage of the InvestOhio credit. I have found this credit to be of great tax benefit for our clients.
Several years ago, the State of Ohio announced the InvestOhio Program for small businesses. Over the past few years, I have been involved in applying for and receiving hundreds of thousands of dollars worth of Ohio Income Tax Credits for Hall, Kistler & Company’s clients. Since the initial launch, the State of Ohio adjusted the holding period from 2 years to 5 years, which deterred a lot of business owners from applying for the credit on their taxes. Recently, the State of Ohio amended the law to change the holding period back to 2 years, making the credit a lot more attractive.
InvestOhio is a non-refundable personal income tax credit to investors that provides new equity (cash) into Ohio small businesses. There are several unique ways to structure this cash infusion into your company. That cash investment into the company is required to be invested into one of five categories of allowable expenditures within six months of its receipt. The investor must then retain his or her ownership interest for a 2-year holding period before the tax credit may be claimed. The small business must similarly retain the property that it purchased from the cash infusion for the entire 2-year holding period.
If this sounds like something that may work for your company, feel free to contact me at 330-453-7633 or firstname.lastname@example.org, as now is the time to revisit this important tax credit.