DR 0113: Rural Jump-Start Zone Credit Schedule (2025)
Colorado · Colorado DOR · Used for tax years 2025
Colorado Form DR 0113 is the 2025 Rural Jump-Start Zone Credit Schedule. It calculates the new business income tax credit and the new hire income tax credit using qualifying business income or employee wages from work in a rural jump-start zone.
Who files this form
You must submit a completed 2025 DR 0113 with your income tax return if you claim either rural jump-start 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 your income tax return and the information that applies to your claim ready:
- C corporations: DR 0112RF for business income apportioned to Colorado and DR 0112 for taxable income and tax.
- Partnerships and S corporations: Part V of DR 0106 for business income apportioned to Colorado.
- Individual partners or shareholders: Colorado K-1 (DR 0106K) for your share of qualifying business income.
- Resident sole proprietors: IRS Schedule C prepared for the new business.
- Nonresident and part-year resident sole proprietors: DR 0104PN for the new business's net profit included on line 15.
- Individuals completing Section D: Your federal return, 2025 DR 0104, and applicable DR 0104AD information to calculate modified Colorado adjusted gross income.
- Employees claiming the new hire credit: The amount of wages paid by the new business for work performed in the zone.
If the business has 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. The supplied text does not give a mailing address or e-file directions.
- New business credit: Complete Sections A and B. C corporations also complete Section C; individuals also complete Section D.
- New hire credit only: Complete Section D, not Sections A, B, or C.
- Partnerships and S corporations: Provide each partner or shareholder a copy of DR 0113 with Sections A and B completed. Also communicate each person's distributive or pro rata share of the rural jump-start new business income calculated on line 6.
Common mistakes
- Claiming incompatible incentives: A taxpayer claiming these benefits may not claim other state tax incentives for which they are eligible because they established the new business in Colorado, including incentives for its new hires.
- Completing unnecessary sections for the new hire credit: For a new hire credit-only claim, do not complete Sections A, B, or C, and leave line 12 blank.
- Entering wages for a new business credit-only claim: Leave line 11 blank unless you are also claiming the new hire credit.
- Including unrelated business income: If a C corporation, partnership, or S corporation has other business activities, include on line 5 only the income attributable to the new business.
- Using excluded income adjustments: When calculating modified Colorado adjusted gross income, do not use the state income tax addback, qualified business income deduction addback, standard or itemized federal deduction addback, gross conservation easement deduction addback, or 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. Income from operations inside and outside the zone is apportioned using property and payroll factors.
How much is the new hire credit?
It equals 100% of the Colorado income tax imposed on wages paid by the approved new business for work performed in the zone.
What if all of the business's property and payroll are inside the zone?
Enter 100% on both line 1 and line 2 of Section A. If the business has any property or payroll outside the zone during the tax year, it must complete the property and payroll worksheet.
Can an individual claim both credits?
The form provides for claiming both. Enter qualifying new hire wages on line 11 and rural jump-start new business income from line 6 on line 12. Section D combines these amounts to calculate the credit.