Colorado Works Program Credit

Colorado employers are allowed to claim a credit of 20% of their annual expenditures made to provide eligible services for their employees who receive public assistance pursuant to the "Colorado Works Program." The credit may not be claimed for more than two years with respect to each individual employee.

"Eligible services" means services that are incidental to the employer's business and are included in the following categories:

1. Child Care Services. The provisionof child care services or the payment of the costs associated with child care services for children of employees receiving public assistance.
2. Health/Dental Services. The provision of health or dental insurance for employees receiving public assistance. The health or dental insurance coverage, if less than the coverage provided through Medicaid, will be supplemented by Medicaid to provide full Medicaid benefits to the employee.
3. Job Training. The provision of job training or basic education for employee receiving public assistance.
4. Transportation. The provision of programs for the transportation of public assistance employees to and from work.

Qualifying Expenditures
The credit is limited to expenditures made on an eligible employee during the first two tax years of their employment. The expenditures must be specifically for the benefit of the eligible employee(s). Example: Tuition for a job training class for an eligible employee would be a qualified expenditure. The cost of running a job training program for qualified and non-qualified employees would not be a qualified expenditure, even if the costs were prorated based on the percentage of qualified versus non-qualified employees trained.

For more information, please see FYI Publication 34.