Colorado’s New Apprenticeship Tax Credit: A Win for Workforce Development

Colorado’s New Apprenticeship Tax Credit: A Win for Workforce Development

In a move designed to bolster workforce development and support emerging industries, Colorado has introduced a new Apprenticeship Tax Credit for employers who invest in registered apprenticeship programs.

Enacted through House Bill 24-1439, this refundable tax credit aims to encourage businesses to train the next generation of skilled professionals while easing the financial burden of doing so. Here’s what employers need to know to take full advantage of this opportunity.

What Is the Apprenticeship Tax Credit?

• The Colorado Apprenticeship Tax Credit provides eligible employers with up to $12,600 per qualified apprentice per income tax year.
• The credit is refundable, meaning businesses can receive the full credit amount even if it exceeds their tax liability.

Who Qualifies?

To be eligible for the tax credit, employers must meet all of the following criteria:

• Be a qualified taxpayer doing business in Colorado.
• Employ one or more apprentices in a Registered Apprenticeship Program (RAP) for at least 6 months during the tax year.
• Ensure apprentices work a minimum of 1,040 hours in the tax year.
• Employ apprentices in new and emerging occupations, as defined by the Colorado Office of the Future of Work.
• Be listed in the Colorado Registered Apprenticeship Program Directory.
• Obtain a credit certificate from Apprenticeship Colorado, the state apprenticeship agency.

How Much Is the Credit?

Employers can earn:

• $6,300 for the first 6 months of eligible apprenticeship employment.
• An additional $1,050 per month for each month beyond 6 months.
• Up to a maximum of $12,600 per apprentice per tax year.

How to Claim the Credit

Eligible employers must claim the credit on their Colorado income tax return using the appropriate form:

• DR0104CR – Individual Income Tax Credit Schedule
• DR0105 – Fiduciary Income Tax Return
• DR0106CR – Colorado Pass-Through Entity Credit Schedule
• DR0112 – C Corporation Income Tax Return

A new line will appear on each of these forms specifically for the Apprenticeship Credit.

Important: The credit cannot be claimed without a certificate issued by Apprenticeship Colorado.

Common Misunderstanding

This credit is for employers, not apprentices. Some may mistakenly believe the credit is available to individuals in apprenticeship programs, but the law clearly states that only the employers who hire and train apprentices are eligible.

Where to Learn More

Employers interested in claiming the apprenticeship credit should consult the following resources:

• Office of the Future of Work Website – for guidance and FAQs
• Section 39-22-562 of the Colorado Revised Statutes
• House Bill 24-1439 – the legislation that created the credit

Final Thoughts

• Colorado’s Apprenticeship Tax Credit is a smart investment in the state’s future workforce.
• Incentivizing hands-on training in new and emerging fields helps employers grow their talent pipelines while supporting economic development across the state.
• If you’re an employer looking to make a lasting impact—and save on taxes along the way—this credit is worth exploring.

What is the process for Apprenticeship Colorado to issue the certificate?

The certificate issued by Apprenticeship Colorado is a critical step in claiming Colorado’s new Apprenticeship Tax Credit. While exact procedural details may evolve, the general certificate issuance process follows these steps:

Employers must:

• Employ one or more apprentices in a Registered Apprenticeship Program (RAP).
• Ensure the apprenticeship is registered with Apprenticeship Colorado and listed in the Colorado Registered Apprenticeship Program Directory.
• Employ apprentices in new and emerging occupations, as defined by the Office of the Future of Work.
• Submit an application or attestation form to Apprenticeship Colorado
• Validate employment duration (at least 6 months), hours worked (at least 1,040), and occupational classification (new and emerging).

Apprentices must:

• Be employed in the RAP for at least 6 months during the tax year.
• Work a minimum of 1,040 hours in that year.

This process may require supporting documentation, such as:

• Payroll records,
• RAP registration numbers,
• Proof of hours worked,
• A statement of compliance with program guidelines.

Apprenticeship Colorado may provide a portal or form submission system for this purpose. Check their website or contact their office for the most current instructions.

Apprenticeship Colorado will:

• Review all submitted documentation,
• Verify eligibility,
• Determine the appropriate tax credit amount (based on duration of employment).
• Issue a credit certificate to the employer,
• Include details of eligible apprentices and the approved credit amount,
• Transmit this information electronically to the Colorado Department of Revenue (DOR).

Employers must keep a copy of the certificate for their records and submit it with their income tax return if required.

This process is annual, so employers must repeat it each tax year they wish to claim the credit.

Important Reminders

• Employers cannot claim the credit without the official certificate.
• Apprenticeship Colorado is the only authority that can issue valid certificates.
• The credit is per apprentice, so employers with multiple qualifying apprentices will receive individualized credit amounts.

Resources

For the most accurate and up-to-date process:

• Visit the Office of the Future of Work
• Look for guidance under the “Apprenticeship Tax Credit” section
• Review the FAQ document and application forms when available

What defines “new and emerging occupations”?

The “new and emerging occupations” requirement is a key eligibility criterion for Colorado’s Apprenticeship Tax Credit and ensures the credit supports workforce development in industries critical to the state’s future economy.

What Does “New and Emerging Occupations” Mean?

In the context of Colorado’s Apprenticeship Tax Credit, a “new and emerging occupation” is defined as an occupation that:

• Is not yet widely established in traditional apprenticeship programs,
• Shows significant growth potential based on labor market trends,
• Supports innovative, high-demand, or technology-driven industries, and
• Is officially recognized as such by the Office of the Future of Work or Apprenticeship Colorado.

How Are These Occupations Determined?

The list of qualifying occupations is developed and maintained by Apprenticeship Colorado, based on:

1. Labor Market Data
   Occupations that are experiencing rapid growth, skill shortages, or are projected to expand in the near future.
2. Industry Input
   Input from businesses, industry associations, and workforce development boards about evolving workforce needs.
3. Innovation and Technology
   Jobs tied to emerging technologies, green energy, cybersecurity, health tech, automation, and advanced manufacturing.
4. Economic Development Goals
   Alignment with the state’s strategic economic priorities or sectors targeted for expansion.

Examples of New and Emerging Occupations

While the specific list may change over time, examples might include:

• Cybersecurity Analyst
• Electric Vehicle (EV) Technician
• Renewable Energy Installer
• Data Analyst
• Healthcare IT Specialist
• Advanced Manufacturing Technician
• AI/Machine Learning Technician
• Behavioral Health Support Specialist
• Green Construction Specialist

How to Check If Your Occupation Qualifies

To find out if an apprentice’s occupation qualifies as “new and emerging,” you should:

1. Visit the official list on the Office of the Future of Work or Apprenticeship Colorado’s website.
   This is usually published in a:
   • Directory, or
   • FAQ/Guidance Document on the state website.
2. Contact Apprenticeship Colorado directly for clarification or to submit a request for review if your occupation is not listed but may qualify.
3. Review the latest guidance tied to House Bill 24-1439 and Section 39-22-562 of the Colorado Revised Statutes, which govern the tax credit.

Where to Find the List

You can find the official “new and emerging occupations” list here:

• Office of the Future of Work – Apprenticeship Tax Credit
  Look for the “FAQs” or guidance documents specifically related to the tax credit.

Final Notes

• If your apprenticeship program is in a traditional trade or well-established field, it may not qualify for the credit unless it adapts to include emerging technologies or techniques.
• If you’re unsure, it’s always best to consult with Apprenticeship Colorado before employing apprentices under the assumption they qualify for the credit.

Need Help or Want to Request a Review?

If your occupation isn’t listed but you believe it qualifies as “new and emerging,” you can:

• Submit a request to Apprenticeship Colorado asking for a determination.
• Provide supporting information such as:
  • Labor market data
  • Industry trends
  • Job descriptions
  • Program details

Contact Apprenticeship Colorado:

• 📧 Email: apprenticeshiptaxcredit@state.co.us
• 📞 Phone: 720-204-8606

Be sure to check the list each tax year — it may be updated annually to reflect changes in labor market trends and Colorado’s economic development goals.

For more information on Colorado’s New Apprenticeship Tax Credit: A Win for Workforce Development, contact me today.