Colorado Enterprise Zone Employer-Sponsored Health Insurance Credit

The Employer Sponsored Health Insurance Credit

For the first two full income tax years while located in an enterprise zone, taxpayers are allowed a credit of $200 for each new business facility employee insured under a health insurance plan or program at least 50% of the cost of which is paid by the taxpayer. Such plan or program may be any health insurance, health maintenance organization or prepaid health plan that is approved by the State Insurance Commissioner for sale in Colorado or it may be a self-insurance program. The program must be reduced to writing and it must be legally enforceable against the taxpayer. [39-30-105 (1)(b) C.R.S.]

For tax years beginning on or after January 1, 1996, the excess credit is not refundable but may be carried forward for a period of up to 5 years.

If the same taxpayer opens a separate new business facility in the zone, the separate facility would have its own two-year health insurance qualifying period.

In the case of an existing facility that qualifies as a new business facility due to expansion, the health insurance credit can be claimed for the first two full income tax years they operate in the enterprise zone as a new business facility. However, the credit is only available for the new business facility employees as computed for an expansion facility. The employees employed at the facility prior to expansion will not qualify for the insurance credit.

 For more information see FYI Income 10. (https://www.colorado.gov/pacific/sites/default/files/Income10.pdf)