Colorado Offers Employers a Tax Credit to Support Alternative Commute Options
What is it?
New for tax years 2023 and 2024, the State of Colorado will provide a refundable tax credit of 50% for employer expenses related to providing alternative transportation options to employees.
The tax credit’s purposes are to increase the use of alternative transportation, reduce traffic congestion and improve the state’s air quality.
Expenses related to programs or infrastructure to support anything other than driving alone, including:
How else does my company benefit?
In addition to this being good for the environment, it’s good for your business, too:
- Attract and retain the best employees. Surveys show people want to work for employers that support commute options!
- Improve productivity, health and morale.
- Position your brand as eco-friendly.
Registration and Resources
- Register today, and complete a quick 10-minute assessment. Visit coloradocleancommute.org to get started.
- Our support team will help distribute an automated survey to your employees at no cost.
- BTC staff will use survey results to prepare a custom commute options plan for your workplace and help every step of the way.
- Once you're registered, BTC can provide additional help to your Boulder business by offering more information, resources, and options for your employees.
Find out all about HB22-1026 at the Colorado Department of Revenue here!
Frequently Asked Questions
Organizations can claim a credit on 50% of their spending on alternative transportation options for employees up to a limit of $250,000/year. So, the maximum tax return that a business could receive is $125,000/year (50% of 250,000).
No, the maximum spend for this program is $2,000/year per employee. And since the tax credit is 50% of the spend, the credit per employee would be $1,000 per year.
No, the tax credit is only available to companies that employ three or more people.
Numerous commuting options can be counted under this law, including:
- Ridesharing arrangements (carpools)
- Vanpool arrangements
- Bikesharing programs (both standard and electric bikes)
- Free or subsidized transit passes, tickets, or fares
- Guaranteed ride home programs
There are numerous benefits to providing alternative commuting options that will help your business in the long run including:
1. Providing alternative commuting solutions helps you attract and retain the best talent possible.
- Commuting difficulties are one of the top reasons people leave their jobs.
- Employees who commute via alternative transportation options get more exercise and spend less time in traffic, leading to a happier, healthier, more productive workforce.
2. Reducing single occupancy vehicle trips helps improve air quality in the region
- The Denver metro area is the seventh worst in the country for ground level ozone pollution which leads to numerous health risks for Denver residents.
3. Improving your company’s carbon footprint establishes your business as a leader in the community.
- Companies who take advantage of the tax credit will be Colorado Clean Commute Approved, marking you as a company that cares about their impact on the region.
Yes! Non-profits and local governments can also take advantage of this program.
To be eligible, you’ll simply need to show how you’ve offered alternative commute options in the workplace. This includes expenses related to notifying and promoting commute options as well as expenses related to providing these services.
You will also need to show how many employees you’ve offered these options to, how many have taken advantage of these opportunities, and if possible, how many trips your employees have taken using an alternative transportation option.
The tax credit is effective from Jan. 1, 2023 through Jan. 1, 2025. So, we’d encourage you to schedule a consultation with Way to Go to learn more about your options, and to develop a plan of action — all free of charge!