Colorado has positioned itself at the forefront of apprenticeship innovation, offering one of the nation's most generous funding packages for employers and sponsors running Registered Apprenticeship programs. Between the state tax credit and new development grants, organizations can access up to $12,600 per apprentice in tax relief plus compete for a share of $4 million in program funding.
Here's how each incentive works and how to stack them together.
The Apprenticeship State Tax Credit
Colorado enacted a robust employer tax credit starting tax year 2023–24. Employers who hire a qualified apprentice in a Registered Apprenticeship can claim a state income tax credit of up to $6,300 for the apprentice's first 6 months, plus $1,050 for each additional month up to 12 months—totaling a maximum of $12,600 per apprentice in a given tax year.
This is one of the more generous apprenticeship tax credits in the country. The apprentice must be employed for at least 6 months to qualify for the base credit, and the credit can continue into a second tax year if the apprenticeship spans calendar years.
A few important limits apply: employers may not claim more than 10 apprentices per year, and an apprentice can only generate credit for a maximum of 24 months total.
To claim the credit, employers apply to the Colorado State Apprenticeship Agency (within the Department of Labor and Employment) for a tax credit certificate. The SAA verifies that the apprentice and program meet the criteria—including RA program registration and proper wage progression—and then the employer attaches the certificate to their state tax return. This credit replaced a smaller "school-to-career" credit that was phased out at the end of 2024.
Apprenticeship Development Grants ($4 Million)
In 2024, Colorado passed HB24-1439 ("Financial Incentives for Expand Apprenticeships"), creating two grant programs with a combined $4 million in funding administered by the Colorado Office of the Future of Work.
Scale-Up Grants received $2 million in initial funding. These competitive grants help employers or entities start new Registered Apprenticeship programs or expand existing ones. An employer, college, or other sponsor can apply for funding to develop curriculum, hire staff to manage the program, or offset other startup costs.
Intermediary Grants received another $2 million. These support organizations that help connect employers with apprentices or convene partnerships to launch programs—think workforce nonprofits, industry associations, or chambers of commerce expanding their apprenticeship outreach and coordination efforts.
Both grant programs require outcome reporting and must prioritize high-demand industries or underserved areas. For FY2024-25, approximately $667,000 was appropriated for each program's initial grants. Providers should watch for "BuildUp" and "ScaleUp" grant announcements from Apprenticeship Colorado (Office of the Future of Work).
Stacking Colorado Incentives with Federal Funding
Colorado explicitly encourages "braiding" multiple funding streams together. The state's $4 million for grants came from the general fund, designed to complement federal SAE grant money used to build the state apprenticeship system's capacity.
A practical example for employers: you could secure a Scale-Up grant to develop your apprenticeship program, then claim the state tax credit once apprentices are hired, and use WIOA OJT funds (up to 50% wage reimbursement) if your apprentices meet eligibility requirements.
On the education side, a community college might use Perkins funds to design the curriculum while apprentices use Pell Grants or concurrent enrollment to cover tuition costs.
The key compliance rule: track outcomes separately for each funding source and ensure no "double dipping" on the same exact cost between a grant and a tax credit claim. Managing multiple funding streams requires audit-ready documentation across OJT hours, RTI completions, and program milestones. Platforms like Craft—free for Registered Apprenticeships—can help sponsors centralize this data and simplify compliance reporting across programs. For teams stacking tax credits and grants, get targeted support on design and documentation.
What's Next for Colorado
With the new tax credit and grants in place, Colorado is doubling down on apprenticeships. The State Apprenticeship Agency (established in 2021) is scaling up and will collect data to report to the legislature on these incentives' effectiveness. Future adjustments may include increasing the cap on the number of apprentices eligible for the credit or renewing grant funding.
For a complete breakdown of federal and state apprenticeship funding options—including WIOA, Perkins V, Pell Grants, and programs in six additional states—download the Definitive Guide to Apprenticeship Funding.
.png)