Colorado Job Growth Incentive Tax Credit
About the Program
he Job Growth Incentive Tax Credit is an eight-year job creation incentive to support competitive, multi-state, or country relocation and expansion projects. The tax credit gives businesses a Colorado state income tax credit equal to 50% of the FICA (Federal Insurance Contributions Act) tax paid by the business per net new job for each calendar year in the credit period.
The tax credit is performance-based. If a company underperforms in job creation or wages, the company will not receive the total credit amount.
If the issued tax credits exceed the business’s income tax liability for the tax year in which the credit is being claimed, the unused tax credit does not become a tax refund. A business may carry forward the unused tax credit and apply it in each of the 10 succeeding income tax years. The tax credit needs to be applied to the earliest tax return possible. New jobs created in each year of the program earn credits for the company, but those new jobs must be maintained for one year before credits are vested.
Your business may not start or announce the proposed project in Colorado until your business submits a final application to Global Business Development and the Colorado Economic Development Commission approves the application. You must wait to complete any of these activities including but not limited to:
- Locating or expanding in the state
- Signing a lease
- Hiring employees related to this project
- Making material expenditures for this project
Eligibility
Business eligibility
Companies need to:
- Create at least 20 net new jobs in Colorado during the credit period (or at least 5 net new jobs if the project is in an Enhanced Rural Enterprise Zone).
- Pay the net new employees an average annual wage of at least 100% of the average annual wage in the county where the project will be located.
- Maintain the net new jobs for at least one year.
- Consider at least one other state or international market for the project.
- Demonstrate that Colorado’s Job Growth Incentive Tax Credit is a major factor in the decision to locate in Colorado.
Project eligibility
The project needs to:
- Be reasonably and efficiently able to locate outside of Colorado.
- Have a reduced chance of locating in Colorado without this incentive.
- Be actively considered in multiple states and/or countries, meaning Global Business Development staff may request additional qualitative and quantitative information that supports the competitiveness of the project.
The minimum average annual wage is set when the project is approved and does not change for the term of the incentive and the credit period.
Average Annual Wage by County(opens in new window)
Businesses already receiving a Strategic Fund Incentive for Job Growth may not receive a Job Growth Incentive Tax Credit for the same net new jobs. However, businesses may receive the Job Growth Incentive Tax Credit and the Location Neutral Employment Incentive (see below), a special type of incentive, for the same permanent net new jobs if the jobs are for remote workers in Colorado’s rural counties.
Application Process
- Prove eligibility: Contact your designated Global Business Development Manager to schedule a discussion or meeting and first and to prove eligibility. Even if a project receives preliminary approval through this discussion or meeting, a project is not guaranteed to proceed to the Colorado Economic Development Commission. GBD staff may halt the application process at any point.
- Submit initial documents: If eligible, your company will submit these documents to GBD at least 41 days before your meeting with the Colorado Economic Development Commission:
- Colorado employment plan
- Cost differential analysis
- Three years of historical company financials
- Submit application: GBD staff will give your company access to the application in the OEDIT application portal. This application is due about 20 days before your meeting with the Colorado Economic Development Commission. GBD will notify your company of Colorado’s incentive offer about 14 days before your meeting with the Colorado Economic Development Commission.
- Full application review and approval: GBD will present the Colorado Incentive Application to the Colorado Economic Development Commission for final approval. If approved, the company has 18 months to start its job creation project.
Explore Business Opportunities Across Colorado
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