For: Businesses considering interstate competitive expansion or relocation projects in Colorado
Type: Tax credit
Amount: Up to 50% of FICA per net new job, subject to statutory considerations
Time period: 8 years
The Job Growth Incentive Tax Credit is an eight-year job creation incentive and provides a state income tax credit equal to 50% of the Federal Insurance Contributions Act (FICA). It is paid by the business on the net new job growth for each calendar year in the credit period.
This incentive supports competitive, multi-state or country relocation and expansion projects. It is performance-based, meaning companies that underperform in job creation or wages 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 amount of the unused tax credit will not be given as a refund. However, it may be carried forward and applied in each of the 10 succeeding income tax years. The tax credit must be applied to the earliest tax return possible.
Companies need to:
To qualify, the project needs to:
A business may not start or announce the proposed project in Colorado, including locating or expanding in the state, hiring employees related to this project, executing a lease agreement, or making material expenditures for this project, until a final application has been submitted and approved by the Economic Development Commission (EDC).
Once approved for the tax credit:
Businesses already receiving a Strategic Fund Job Growth Incentive may not receive a Job Growth Incentive Tax Credit for the same permanent net new jobs.
Enhanced Rural Enterprise Zones
If the company’s project falls within an Enhanced Rural Enterprise Zone, the net new jobs requirement drops from 20 to 5.
Businesses interested in requesting a Job Growth Incentive Tax Credit commitment should contact our staff to preliminarily determine if the business meets the requirements. Businesses who have not yet received an incentive and are interested in applying should contact Mike Landes. Businesses who have already received their incentive should contact Sean Gould.