The Alternative Transportation Options Tax Credit
Colorado businesses play a key role in improving air quality, according to state legislators. So much so, the 2022 Colorado General Assembly passed and put into effect the Alternative Transportation Options Tax Credit, or HB22-1026, to encourage and incentivize employers to help reduce carbon dioxide greenhouse gas emissions.
Now Colorado businesses can get a significant tax break when they provide alternative transportation programs for their employees. HB22-1026 gives qualified businesses a 50% income tax credit of up to $250,000 yearly in 2023 and 2024 for associated expenses when they provide alternative transportation options for their employees. The maximum amount of qualifying expenditures in any income tax year for which an employer may claim a credit is $250,000. As a result, the maximum credit an employer may claim for a tax year is $125,000. Additionally, the maximum amount of qualifying expenditures for any one employee is $2,000 per tax year.
If you ask us–or any Colorado business owner, really—that’s a pretty big deal! And our team of experts is here to help you understand the ins-and-outs of this tax credit. We’ve also put together a handful of thought-starters to help you consider some quick win commuter benefit programs that could help your organization qualify for the program.
Ready to dive in? Let’s go.
What is the Colorado Clean Commute Certification Program?
While you heard about this tax credit, you may have also come across the Colorado Clean Commute Certification Program. This program was developed by the Denver Regional Council of Governments (DRCOG)’s Way to Go Program in partnership with Commuting Solutions and eight other Transportation Management Organizations throughout the Denver Region to help area businesses get the information and assistance needed to qualify for the tax credit. When you work with us to either develop a new commuter benefit program or to evaluate existing program and initiatives at your workplace, we’ll help you get certified through this program, which means you’re on the path to getting your tax credit.
Ideas to Kick Start Qualification
Since single-car use is a leading contributor to not only traffic congestion but to dangerous air pollution through excessive toxic emissions, qualifying for the tax credit centers around businesses offering employees accessible transportation alternatives to the typical single-car commute.
Great news for employers in Colorado’s northwest metro region, who have access to multimodal transportation options and improved access. Our team of experts have put together a few ideas for commuting programs you can consider, and which we can help with.
- Start a transit pass program. Transit can provide a cost savings for employees from driving, often costing just a fraction of gas and maintenance costs. Starting a program to let employees order transit fare through your company can help them maximize cost savings. Employees who purchase their transit fare through their employee often qualify for pre-tax payroll deduction and can receive the fare at a discounted rate based on RTD’s reduced pricing and even additional subsidized costs provided by the employers. Is this idea piquing your interest? Talk with our team to find out how to get a transit pass program started for your company.
- Invest in biking amenities. Biking has become more feasible for many commuting to and from work, with the addition of the U.S. 36 Bikeway, Bike-n-Ride shelters alongside several RTD transit stations, and much more bike facility investments in the northwest metro region. This regional investment in biking connectivity should be equally supported by local investments in biking infrastructure. Consider equipping your worksite with low-cost biking amenities, such as bike parking, lockers, and other secure storage. You may also consider financial incentives such as biking stipends to motivate employees who are choosing a more active commute option like biking in lieu of driving alone. You can do this either as a monthly or quarterly health and well-being stipend or as a “cash out” bonus for giving up a parking spot. Talk to our team to learn more!
- Consider ridesharing for employees who live close by. Ridesharing is an important commute strategy for employees who may not have suitable transit access or may not find biking or walking viable. Whether it’s carpooling with a coworker or joining a vanpool, sharing the ride to work can help employees save valuable time and money. Commuting Solutions can show your employees how to make use of WaytoGO’s ridematching tool to partners if they need to find a ride in beyond your worksite.
Help Is Available From Commuting Solutions
Reach out to Commuting Solutions if your business needs information and assistance about qualifying for the tax credit. Our team is ready to support you.
Contact our team member:
Cathi Wielgus, Programs & Outreach Specialist
cathi@commutingsolutions.org
