NM Angel Investment Tax Credit

NM Angel Investment Tax Credit

Provides tax credits for accredited New Mexico investors making qualifying equity investments in local research or manufacturing firms.

Eligibility · United States · US-NM

The New Mexico Angel Investment Tax Credit (NMSA 1978 §7-2-18.17) is a non-refundable state income tax credit administered by the New Mexico Taxation and Revenue Department (TRD) Business Credit Audit Team. The program incentivizes New Mexico-resident accredited investors to deploy capital into state-based research and development or manufacturing companies by crediting 25% of qualifying investments against the investor's New Mexico income tax liability, capped at $62,500 per investment. An investor may claim up to five qualifying investments per taxable year, with one investment per round per investor. Unused credit carries forward for up to five consecutive taxable years. A statewide aggregate cap of $2,000,000 per calendar year applies on a first-come, first-served basis. The program received a five-year legislative extension in 2026, continuing its availability beyond its previously approaching sunset.

The credit is available only to individual investors who file a New Mexico income tax return and meet the SEC definition of an accredited investor — either a net worth of at least $1 million or annual income of at least $250,000 for the two prior years. The investee company must be based in New Mexico, engaged in qualified research or manufacturing, and registered with New Mexico Economic Development Department and TRD for angel-eligibility certification before the investment is made. The credit is non-refundable, meaning it can offset tax liability but does not generate a cash refund; any excess carries forward.

To claim the credit, qualifying investors file TRD Form RPD-41320 (Angel Investment Credit Claim Form) along with the investor and investee certification packet through TRD. The investee company's pre-registration for angel-eligibility certification is a gateway requirement — investments made before certification is issued do not qualify. Because the $2M annual statewide pool is allocated first-come, first-served, investors and target companies should complete certification early in the calendar year. Contact TRD Business Credit Audit Team at TRD-BusinessCredit@tax.nm.gov for certification status and forms.