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Employer Contributions

Smart employers recognize the cost to keep employees is far less than the cost to replace and retrain. In fact, recent research indicates it costs 200% of a key employee’s salary to fill their seat when they leave. Retain your talent by offering the benefits they care about most, like help with the overwhelming task of saving for college.

Thanks to new legislation, Colorado businesses get a tax credit when they contribute directly to their employees’ CollegeInvest accounts.

  • Colorado companies: To ensure your Employer tax credit can be validated with the Colorado Department of Revenue, companies must record their contributions via the CollegeInvest Employer portal ( and funds must be sent directly to CollegeInvest headquarters in Denver.   IMPORTANT NOTE: Contributions sent directly to an employee’s account, while still eligible, may trigger a state audit.

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Here are more specifics about employer contributions:

What tax form do I need to claim my credit?

Form DR 0289, titled Employer Contributions to Employee 529 Qualified State Tuition Program, can be found at near the bottom under Other Forms.

Why should I add this as a new benefit?

Colorado families tell us that they’re already saving as much as they possibly can. And 93% of them wish their employer would help. Meaningful benefits DO make a difference in retaining your employees.

How does the tax credit work?
For every dollar an employer contributes to an employee’s CollegeInvest 529 account, the employer receives a 20% tax credit, up to a maximum of $500 per employee per year. So, an employer could give up to $2,500 per employee and receive $500 for each person. Read the official tax law here.
How much can I contribute?
There is no limit to what you can contribute, however, the tax credit will max out at $2,500 per employee, per year.
Is there a minimum number of employees needed to participate?
No. Any size company can participate.
If I contribute to one employee’s account, do I have to contribute to all my employees’ accounts?
No. This program is not subject to the nondiscrimination rule or the Employee Retirement Income Security Act of 1974 (ERISA).
As a small business owner, can I contribute to my own account through my business?
Yes, there are no restrictions on the type (S-Corp, LLC, etc.) or size of employer. Whether the new business tax credit or the traditional, personal dollar-for-dollar deduction is more advantageous to you will depend on your particular business operations. We encourage you to consult with a tax professional for advice.
For payroll purposes, is this counted as wages to the employee?
Yes, and it is subject to taxes and withholdings, just as their salary is.
What if my employee is not the account owner?
The law specifies that in order for a business to receive the tax credit, the contribution must be made to an employee’s account. If, for instance, your employee’s spouse is the account owner, this will not meet the standard of the tax law. So, have your employee open a new account in their name at
How long will it take until an employee receives my contribution into their account? And how long until the funds are vested?
Deposits will show up approximately two weeks from the date we receive your funds. They are fully vested immediately.
Is there an enrollment period to sign up?
No, you can enroll and start contributing any time at
What is the best way to implement this new program?
It’s completely up to you. Some employers are doing a 529 Match, others are contributing as a bonus or when an employee has a new baby or work anniversary. There are many creative ways to contribute. Here are some suggestions.
Still have questions?
No worries – we’re here to help: 303-376-8804 or
One of the easiest and most effective ways to create a rewarding work environment.

One of the easiest and most effective ways to create a rewarding work environment.

We are competing for the best employees in a tight Colorado workforce.  Having meaningful benefits helps us attract and retain top talent.  That’s why contributing to our employees’ CollegeInvest accounts is a no-brainer.Derek Dykstra,President & CEO – GRACON LLC