The Credit for Conversion Costs to an Employee-Owned Business Model is available to current Colorado-headquartered businesses and their employees to provide an incentive to establish employee stock ownership plans, worker-owned cooperatives, and employee ownership trusts. The credit is allowed only to taxpayers who have received a credit certificate from the Colorado Office of Economic Development. Additional information about credit requirements and certification can be found online at https://oedit.colorado.gov/employee-ownership-tax-credit.
How do I claim the Credit for Conversion Costs to an Employee-Owned Business Model?
The Credit for Conversion Costs to an Employee-Owned Business Model is claimed on the applicable credit schedule of the taxpayer's Colorado income tax return:
DR 0104CR - Individual Credit Schedule
DR 0105 - Schedule G
DR 0106CR - Colorado Pass-Through Entity Credit Schedule
DR 0112 - C Corporation Income Tax Return
To claim the credit, the taxpayer must submit with their return a copy of the credit certificate issued by the Colorado Office of Economic Development.
Filing Electronically
File an electronic return using our free and secure Revenue Online service at Colorado.gov/RevenueOnline. You may also file using third party tax software or with a paid tax preparer. Please be aware that not all third party tax software supports the credit. Taxpayers claiming the credit on an electronically filed return must scan and submit the credit certificate through Revenue Online E-Filer Attachment, attach the credit certificate to their electronic return, or mail a copy of the credit certificate with the DR 1778 E-Filer Attachment.
Filing using a Paper Return of Downloaded PDF Form
File by paper by downloading and completing the applicable forms. Forms and instructions are available online at https://tax.colorado.gov/forms-by-tax-type.