DEPARTMENT OF LABOR AND EMPLOYMENT COLORADO APPRENTICESHIP TAX CREDIT RULES 7 CCR 1108-2 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ Adopted November 27, 2024; effective January 14, 2025.

1.1 Statement of Authority.

This regulation is adopted pursuant to the authority in C.R.S. §§ 39-22-562 and 8-15.7-102 and is intended to be consistent with the requirements of the State Administrative Procedures Act, C.R.S. § 24- 4-101 et seq. (the “APA”) and in conformity with 7 CCR 1108-1 and regulations promulgated by the Secretary of Labor under the National Apprenticeship Act, 29 U.S.C. 50.

1.2 Purpose and Incorporation by Reference.

A. The general purpose of these Colorado Apprenticeship Tax Credit Rules (“Rules”) is to exercise the authority of the Director of the State Apprenticeship Agency to enforce and implement rules establishing the standards for issuing apprenticeship tax credit certificates.

B. 29 C.F.R. § 29 (2024) is hereby incorporated by reference. These regulations are available for public inspection at the Colorado Department of Labor and Employment, Office of the Future of Work, 633 17th Street, Denver CO 80202. Copies may be obtained from this Office at a reasonable charge, or can be accessed electronically from the Apprenticeship.gov website. Certified copies of these regulations are available from the U.S. Government Publishing Office Online Bookstore. Pursuant to C.R.S. § 24-4-103(12.5)(b), the agency shall provide certified copies of the statutes and regulations incorporated at cost upon request or shall provide the requestor with information on how to obtain a certified copy of the material incorporated by reference from the agency originally issuing the statutes. All Office of the Future of Work (OFW) rules are available to the public on the State Apprenticeship Agency Policy & Legislation webpage. Where these Rules have provisions different from or contrary to any incorporated or referenced material, the provisions of these Rules govern so long as these are consistent with Colorado statutory and constitutional provisions and in conformity with regulations promulgated by the Secretary of Labor under the National Apprenticeship Act, 29 U.S.C. 50.

C. If any part of these Rules is held invalid, the remainder shall remain valid, and if any part is held not wholly invalid, but in need of narrowing, it will be retained in narrowed form.

1.3 Definitions.

“Apprentice” means a worker at least 16 years of age, except where a higher minimum age standard is otherwise fixed by law, who is employed to learn an apprenticeable occupation as provided in article 15.7, title 8, C.R.S. and 29 CFR 29.4 under standards of apprenticeship fulfilling the requirements of 29 CFR 29.5.

“Apprenticeship Agreement” means a signed written agreement, complying with 29 CFR 29.7, between an apprentice and either the apprentice's program sponsor, or an apprenticeship committee acting as agent for the program sponsor(s), which contains the terms and conditions of the employment and training of the apprentice.

“Certificate of registration” means documentary evidence that the State Apprenticeship Agency has registered an apprenticeship program pursuant to article 15.7, title 8, C.R.S. and federal guidelines as evidenced by a Certificate of Registration or other written indicia. “Credit" means the credit against income tax created in C.R.S. § 39-22-562. “Employee" means and includes every individual who is a resident or domiciled in the state of Colorado performing services for an employer, either within or without or both within and without the state of Colorado, or any individual performing services within the state of Colorado, the performance of which services constitutes, establishes, and determines the relationship between the parties as that of employer and employee, and includes officers of corporations and individuals, including elected officials, performing services for the United States government or any agency or instrumentality thereof or the state of Colorado or any county, city or municipality, or political subdivision thereof, except that “employee” includes only those individuals who perform services for the taxpayer for at least 1,040 hours per income tax year.

“New and emerging industry” does not include the building and construction trades as described in C.R.S. § 8-15.7-105 (4). The State Apprenticeship Council defines the jurisdiction of the building and construction trades and new and emerging industries.

“Qualified taxpayer" or "taxpayer" means a person subject to tax pursuant to article 22, title 39, C.R.S., that is doing business in this state and that employs an apprentice in the relevant tax year. “Registered apprenticeship program” means an apprenticeship program that is registered by the State Apprenticeship Agency as provided in C.R.S. § 8-15.7-101(13). An apprenticeship program may be registered by the SAA if it directly registers with the SAA, or if it is an apprenticeship program registered by the US DOL’s Office of Apprenticeship, or another State Apprenticeship Agency to which the SAA must accord reciprocal approval of apprentices, apprenticeship programs and standards under federal law if the program sponsor requests such reciprocity be granted. “Small business" means a business with fewer than fifty employees. "State Apprenticeship Agency" or "SAA" means the State Apprenticeship Agency created in C.R.S. § 8- 15.7-102.

“State apprenticeship council” or “SAC” means the state apprenticeship council created in C.R.S. § 8- 15.7-105.

1.4 Requirements for Apprenticeship Tax Credit

A. Reserving a Tax Credit.

1. 1. The taxpayer must submit an application to the SAA to reserve a tax credit for a given tax year beginning in 2025. The application requirements will be specified on the Apprenticeship Colorado website.
2. 2. The SAA shall review the application to determine whether it meets the minimum requirements for a tax credit reservation and may reserve for the benefit of the qualified taxpayer all or part of the credit amount requested. The SAA shall notify the taxpayer of its decision whether to reserve a tax credit and, if a reservation is made, the amount reserved.
3. 3. The reservation of a tax credit does not entitle the taxpayer to the issuance of a tax credit certificate until the SAA has verified that the taxpayer has met all the requirements in Sections 1.4(B) and 1.5 and C.R.S. § 39-22-562.

B. Claiming a Tax Credit.

1. 1. In order to claim an apprenticeship tax credit, an employer must submit an application for reservation of a tax credit and must meet the following requirements.
   1. a. Qualified taxpayer. A qualified taxpayer is a person subject to tax pursuant to article 22, title 39, C.R.S. that is doing business in this state (must file a Colorado income tax return) and that employs an apprentice in Colorado in the relevant tax year. In addition, a qualified taxpayer must either:
      1. i. have established a registered apprenticeship program in good standing with the SAA and received a certificate of registration from the SAA, USDOL’s Office of Apprenticeship, or another State Apprenticeship Agency; or ii. be an employer partner of a registered apprenticeship program in good standing with the SAA as verified by the qualified taxpayer's inclusion on the Colorado State Apprenticeship Directory pursuant to C.R.S. § 8-83-
         1. 308. Inclusion on the Colorado State Apprenticeship Directory requires the registered apprenticeship program sponsor to add the qualified taxpayer as an employer partner in the Registered Apprenticeship Partners Information Database System (RAPIDS) or any successor data management system.
   2. b. Apprentice. The apprentice(s) that the employer claims the tax credit for must be:
      1. i. An employee of the qualified taxpayer for a minimum of six months in the tax year, and ii. Registered with the SAA, USDOL’s Office of Apprenticeship, or another State Apprenticeship Agency, as evidenced by a current Apprenticeship Agreement on file in the Registered Apprenticeship Partners Information Database System (RAPIDS) or any successor data management system.
   3. c. New and emerging industry. The apprentice must participate in a registered apprenticeship program in an occupation defined as “new and emerging”. The SAC defines the jurisdiction of the building and construction trades and new and emerging industries. The SAC shall review occupations on an annual basis and publish a list to the SAA website.

C. Credit Amounts.

1. 1. The credit is equal to up to $6,300 for six months of employment, plus up to $1,050 for each additional month of employment, for a maximum of $12,600 per apprentice per tax year.

D. Limitations.

1. 1. The taxpayer shall not claim a credit for:
   1. a. More than ten apprentices per income tax year;
   2. b. The same apprentice for more than two consecutive income tax years; and c. An apprentice for months when the apprentice did not receive wages from the taxpayer.

1.5 Standards of Apprenticeship Program Quality

A. As required by article 15.7, title 8, C.R.S., registered apprenticeship programs must conform to the standards located at 7 CCR 1108-1(1.5) and federal regulations published in 29 CFR Parts 29 and 30 in order to be eligible for approval and registration by the SAA.

B. The SAA shall perform its duties as set forth in C.R.S. §8-15.7-102 and 7 CCR 1108-1. Related to program quality, the SAA conducts reviews of registered apprenticeship programs and quality assurance assessments for compliance with federal and state regulations and state policies, including equal opportunity in apprenticeship, at the end of the first full training cycle. Subsequent reviews occur at least every five years.

C. Registered apprenticeship programs not in conformity with applicable state and federal law, regulations, and guidance shall not be considered in good standing for purposes of claiming the tax credit for apprentices.

_________________________________________________________________________ Editor’s Notes History New rule eff. 01/14/2025.