The Enterprise Zone Job Training Tax Credit helps businesses develop and retain a skilled workforce. Businesses located within enterprise zones can earn a state income tax credit of 12% of eligible job training costs for employees working within the enterprise zone. Tax credits earned may be used against income tax liability and carried forward for up to 12 years.
The Colorado legislature created the Enterprise Zone (EZ) Program to encourage development in economically distressed areas of the state. The 16 designated enterprise zones have high unemployment rates, low per capita income, or slow population growth. Local enterprise zone administrators manage their respective enterprise zones.
We recommend reviewing the Enterprise Zone Income Tax Credit Guide for the complete eligibility requirements.
To use this map, type in your address in the top left-hand corner. You may need to scroll out to identify whether or not you are located within an enterprise zone. If your location is highlighted in a color, you are located in an enterprise zone. If your location is in a checkered colored area, it is located in an enhanced rural enterprise zone.
Visit the Colorado Information Marketplace for enterprise zone map resources.
Both new and existing businesses located in enterprise zones may qualify for the credit. For businesses that open in the middle of a tax year, you will need to prorate the credit based on the number of full calendar months during the year that the business operated in the zone.
Businesses need to be legal under both state and federal law. For example, businesses in the marijuana industry do not qualify for this tax credit.
You need to pre-certify before you begin the training. To qualify for this tax credit, your training program needs to:
- be a structured training or basic education program
- conducted on-site or off-site by the taxpayer or another entity
- improve the job skills of your employees, who need to work primarily in an enterprise zone
Eligible expenses include:
- expensed equipment
- training staff wages or fees
- training contract costs
- temporary space rental
- travel expenses
- real property and capital equipment used primarily for qualified job training program purposes or to make a training site accessible
- space lease costs
These expenses are not eligible for the tax credit:
- employee wages
- on-the-job training
- costs for training employees who your business leases
Once you determine that your business is in an enterprise zone, there are three steps to claim this tax credit.
1. Complete the pre-certification application on the OEDIT application portal. You will need to pre-certify each business location. You will need to apply for pre-certification in advance of the activity that is eligible for the credit.
- Log in to your account or create a new account. To protect your personal information, we manually add new users to the portal, so it may take several days to activate your account. Review this Enterprise Zone Pre-certification How-To Guide (PDF).
- Pre-certify each year. You can pre-certify up to three months before the start of the business’ tax year. You can pre-certify at any time during the tax year; however the business is only eligible to earn enterprise zone tax credits for the period certified.
- The local enterprise zone administrator will review and approve your pre-certification application.
2. Complete the certification application on the OEDIT application portal.
- Log in to your account and fill out the certification application. Review this Enterprise Zone Certification How-To Guide (PDF).
- Activity conducted during the covered pre-certification period is eligible for enterprise zone tax credits.
- The local enterprise zone administrator will review and approve your certification application.
- For tax years prior to 2014 (formatted YY-XXXXXX) use the EZ Legacy Application System.
3. File Colorado income taxes and include certification documents.
- Once the certification application is approved by the local enterprise zone administrator, you will receive via email a tax credit certificate that you need to submit with your Colorado income tax return. You can also access the certificate in the OEDIT application portal. This certificate replaces Colorado Department of Revenue forms DR0074, DR0076, and DR0077.
- Complete and submit the Colorado Department of Revenue form DR1366 and the EZ Tax Credit Certificates with your Colorado income tax return.
- Partnerships need to also complete and submit the DR0078a for distribution of the credits.
Amend your enterprise zone record
If you misreported or need to modify your enterprise zone certification application, you can amend or reset your certification by submiting the amendment form. To amend or submit certification applications for years 2014 or earlier (formatted YY-XXXXXX) you need to use the Enterprise Zone Legacy Application System.
Transfer ownership of your enterprise zone record
If your business changed accounting firms, you will need to transfer your pre-certification and certification records. A business owner or authorized company official will need to submit the transfer form.