DR 0113: Rural Jump-Start Zone Credit Schedule (2024)
Colorado · Colorado DOR · Used for tax years 2024
Form DR 0113 is Colorado’s 2024 Rural Jump-Start Zone Credit Schedule. It reports qualifying business income or employee wages and calculates the new business or new hire income tax credit for businesses approved for the rural jump-start program by the Economic Development Commis
Who files this form
Anyone claiming either of these rural jump-start credits must submit a completed DR 0113 with the income tax return claiming the credit:
- New business income tax credit: For businesses approved for the rural jump-start program by the Economic Development Commission.
- New hire income tax credit: For employees of a business approved by the commission, based on wages for work performed in the rural jump-start zone.
Individuals may claim the new business credit as sole proprietors or as partners or shareholders in a partnership or S corporation.
What you'll need
Have the information that applies to your credit ready:
- Identification: Name, SSN or ITIN, FEIN, and mailing address, as applicable.
- Business income: The relevant Colorado return or schedule, Colorado K-1 (DR 0106K), or federal Schedule C. The source depends on your business type and residency.
- C corporation credit: DR 0112RF for business income and DR 0112 for Colorado taxable income and tax.
- Individual credit: Your federal adjusted gross income, 2024 Colorado Individual Income Tax Return (DR 0104), and applicable additions and subtractions, including DR 0104AD.
- New hire credit: The amount of wages paid by the approved business for work performed in the zone.
If the business had property or payroll outside the zone, complete the property and payroll worksheet. It uses beginning- and end-of-year property values, rental information, and compensation paid within the zone and everywhere. The worksheet calls for an attached schedule for leased property.
How to file
Submit the completed DR 0113 with the income tax return on which you claim the credit.
- C corporations claiming the new business credit: Complete Sections A, B, and C.
- Individuals claiming the new business credit: Complete Sections A, B, and D.
- Individuals claiming only the new hire credit: Complete Section D, not Sections A, B, or C.
Partnerships and S corporations must provide each partner or shareholder with a copy of DR 0113 with Sections A and B completed. They must also communicate each person's distributive or pro rata share of the rural jump-start new business income calculated on line 6.
The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Claiming conflicting incentives: A taxpayer claiming these benefits may not claim another state tax incentive for which they are eligible because they established the new business in the state, including incentives for its new hires.
- Filling in both income lines when claiming only one credit: In Section D, leave line 11 blank unless claiming the new hire credit. Leave line 12 blank unless also claiming the new business credit.
- Including unrelated business income: C corporations, partnerships, and S corporations with other business activities must include on line 5 only the income attributable to the new business.
- Using excluded adjustments on line 14: Do not include the state income tax, qualified business income deduction, standard or itemized federal deduction, or gross conservation easement deduction addbacks when computing modified Colorado adjusted gross income. Also exclude the qualifying charitable contribution subtraction.
Questions people ask
How much is the new business credit?
It equals 100% of the Colorado income tax imposed on income derived from the business's activities in the rural jump-start zone. Businesses operating inside and outside the zone apportion their income using property and payroll factors.
What if all of the business's property and payroll are in the zone?
Enter 100% on both line 1 and line 2 of Section A.
How much is the new hire credit?
It equals 100% of the Colorado income tax imposed on wages paid by the approved business for work performed in the rural jump-start zone. Section D apportions the employee's tax to determine the credit.
Can I claim both the new business and new hire credits?
The form allows for both when you have qualifying wages as an employee and qualifying income from ownership in a new business. Enter the qualifying wages on line 11 and the rural jump-start new business income from line 6 on line 12.