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Colorado Introduces State WOTC Bill

Colorado State Representative Dianne Primavera has proposed House Bill 16-1372, “Concerning the Creation of the Colorado Work Opportunity Income Tax Credit.”

The bill states as a rationale:

The General Assembly further finds that when such employees are hired and thus move out of unemployment, the federal government and the state see savings in the cost of these public assistance programs because there are fewer individuals in need. In some estimates, the savings to Colorado are in the neighborhood of seventy-nine million dollars just as a result of the federal work opportunity tax credit. Such savings to the state would increase if the incentive to the private-sector business is even greater because the state offers its own work opportunity tax credit.

The bill proposes to create a state income tax credit based on and linked to the federal WOTC program. Businesses who employ employees within the state who have been certified as a member of a WOTC target group would be able to claim an a state income tax credit for tax years starting in 2017. The amount of the credit is up to $9,000 over two years for a long-term family assistance recipient (which is the same as the long-term TANF category in WOTC). The credit possibilities are:

  • 1. 40% of $4,500 in first-year wages for targeted groups besides long-term TANF (if the employee works at least 400 hours)
  • 2. 25% of $4,500 in first-year wages for targeted groups besides long-term TANF (if the employee works between 120 and 400 hours)
  • 3. If the employee is a veteran, the credit is based on $4,800
  • 4. 40% of $10,000 in first-year wages plus 50% of 10,000 in second-year wages for an employee certified in the long-term TANF target group
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