Applying for the New Colorado Job Growth Incentive Tax Credit
Monday, 14 September 2015
by Seth Gomm, JD MBA
Governor Bill Ritter recently signed into law a new tax credit for businesses that wish to create new jobs in Colorado. Businesses operating in Colorado can take advantage of the tax credit that can equate to 3.825% of the wage the business pays to each employee that qualifies under the credit.
Background
On May 4, 2009, Governor Bill Ritter signed into law House Bill 09-1001, known as the Colorado Job Growth Incentive Tax Credit (the “Credit”), which provides an income tax credit to firms that create jobs in Colorado. The Colorado Office of Economic Development and International Trade (the “Commission”) is charged with determining if an employer qualifies for the Credit. In order to qualify for the Credit an employer must, after applying and obtaining conditional approval from the Commission, create a certain number of jobs and maintain such new jobs for at least one year. The value of the Credit is typically equal to one-half of the amount the employer must pay in FICA taxes for the newly created jobs (approximately 3.825% per year for each new job’s annual wage). The Credit is available for tax years 2009 through 2018 with a maximum Credit eligibility period of no more than five total consecutive tax years per employer. Following is a checklist that can be used to help determine if an employer is eligible and to navigate the application process:
General Pre-Qualifications
1. The employer must show that, but for the Credit, the employer would have likely created the new jobs in a state other than Colorado.
2. The employer must retain the new jobs for at least one year.
3. The new jobs must pay an average yearly wage that is at least 110% of the average yearly wage of the county in which the employer is located.
4. The employer must provide a minimum of 20 new jobs if the project that created the new jobs is NOT located in an Enhanced Rural Enterprise Zone (“ERE Zone”). If the project that created the new jobs is located in a ERE Zone, the employer only needs to provide a minimum of five new jobs, but the local community located in the ERE Zone must provide rationale of the importance to such local community of the project that will create the jobs.
This information is made available by Spaulding Law for educational purposes only and not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Spaulding Law, unless you have entered into a separate representation agreement. This information should not be used as a substitute for competent legal advice from a licensed professional attorney.
Background
On May 4, 2009, Governor Bill Ritter signed into law House Bill 09-1001, known as the Colorado Job Growth Incentive Tax Credit (the “Credit”), which provides an income tax credit to firms that create jobs in Colorado. The Colorado Office of Economic Development and International Trade (the “Commission”) is charged with determining if an employer qualifies for the Credit. In order to qualify for the Credit an employer must, after applying and obtaining conditional approval from the Commission, create a certain number of jobs and maintain such new jobs for at least one year. The value of the Credit is typically equal to one-half of the amount the employer must pay in FICA taxes for the newly created jobs (approximately 3.825% per year for each new job’s annual wage). The Credit is available for tax years 2009 through 2018 with a maximum Credit eligibility period of no more than five total consecutive tax years per employer. Following is a checklist that can be used to help determine if an employer is eligible and to navigate the application process:
General Pre-Qualifications
1. The employer must show that, but for the Credit, the employer would have likely created the new jobs in a state other than Colorado.
2. The employer must retain the new jobs for at least one year.
3. The new jobs must pay an average yearly wage that is at least 110% of the average yearly wage of the county in which the employer is located.
4. The employer must provide a minimum of 20 new jobs if the project that created the new jobs is NOT located in an Enhanced Rural Enterprise Zone (“ERE Zone”). If the project that created the new jobs is located in a ERE Zone, the employer only needs to provide a minimum of five new jobs, but the local community located in the ERE Zone must provide rationale of the importance to such local community of the project that will create the jobs.
This information is made available by Spaulding Law for educational purposes only and not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Spaulding Law, unless you have entered into a separate representation agreement. This information should not be used as a substitute for competent legal advice from a licensed professional attorney.
