Colorado Opportunity Zone Program

In accordance with the updated OZ requirements, OEDIT is embarking on a multi-month process to support the Governor in nominating up to 25% of Colorado’s eligible low-income census tracts to be opportunity zones. Federal guidance identifies 360 eligible tracts in Colorado, so the state will be able to designate 90 census tracts for OZ 2.0.

Governor Polis must nominate census tracts to the US Treasury in a 90-day determination period beginning July 1, 2026. We are engaging local governments, economic development organizations, and other community leaders, as well as the public at large, to ensure the State’s nominations match local priorities.

Eligible Opportunity Zones in Colorado

On April 6, 2026, the U.S. Treasury released the official list of low-income tracts eligible for designation in the second iteration of the OZ program, and associated guidance.

• Guidance: Revenue Procedure 2026-12 (which can be found embedded in Treasury, IRS Provide Guidance to States), describes the nomination process and identifies the eligible population census tracts, including those that are comprised entirely of a rural area, which may be nominated by the CEOs of the States (the Governor), the District of Columbia, and the U.S. territories (States) to be designated as QOZs beginning on January 1, 2027.
• Colorado Tracts Eligible for OZ 2.0 Designation (Google Sheet), from the IRS official list of eligible census tracts.

Federal Guidance on Data Set Limitations

Acknowledging that there are limitations in the data used to determine eligibility of the census tracts, the guidance released by the U.S. Treasury and the IRS provides that they will allow the nomination of off-list census tracts under certain circumstances: 

“While the Appendix to this revenue procedure and the Information Resource provide a list of population census tracts that are eligible for nomination as a QOZ, there may be population census tracts that could be eligible for nomination as a QOZ that do not appear on this list.  The Secretary will consider a State CEO’s nomination of a population census tract not listed in the Appendix or Information Resource to the extent that the nomination is accompanied by a detailed analysis, including current data collected at the census tract level, demonstrating the nominated population census tract satisfies the requirements under § 1400Z-1(c)(1).”

OZ Designation 2.0 Input Form for Off-list Tracts: OEDIT has adopted a second input form and guidance to consider input on census tracts that are not listed as officially eligible by the U.S. Treasury ("off-list tracts"). The Input Form for Off-list Tracts allows all interested parties, including economic developers, local governments, business and community leaders, and members of the public, to advocate for off-list census tracts that meet an alternative methodology for analyzing eligibility. Submissions are due by June 30, 2026. 

Past Webinars

OEDIT staff can share recordings of the following webinars as requested.

• Opportunity Zones 101 (November 2025): A comprehensive review of the OZ incentive, with a greater emphasis on the substance, including the changes from H.R.1, and a lesser emphasis on the OZ selection process and next steps.
  • Opportunity Zones 101 Presentation, (Google Slides)
• Colorado’s Opportunity Zone 2.0 Selection process (November 2025): A high-level overview of the OZ incentive and a more detailed look at the planned OZ selection process and next steps in Colorado.
  • Colorado’s Opportunity Zone 2.0 Selection Process Presentation, (Google Slides)
• Speaker Series: Preparing for Colorado Opportunity Zone Investment (December 2025): Join Kenan Fikri, Senior Fellow with the Economic Innovation Group, and Stephanie Copeland, Partner and Chairman of Colorado's own Four Points Funding, to learn how to maximize the investor and community benefits of the second iteration of the Opportunity Zone Program.
  • Speaker Series Presentation, (Google Slides)
• Speaker Series: Strategic Tax Planning for Opportunity Zone Investment (January 2026): Join Trinity Bradley-Anderson, Tax Partner at Sorren, for technical insight on Opportunity Zone real estate investments.
  • Speaker Series Presentation, (PDF)
• Public Input Tools for Colorado’s Opportunity Zone 2.0 Designation Process (May 2026): Join OEDIT for a walkthrough of the tools developed for public input on census tracts for Colorado's OZ 2.0 designation. 
  • Public Input Tools Presentation, (Google Slides)

Opportunity Zones Selection Process Timeline

The exact timing of Colorado’s OZ selection process depends on the U.S. Treasury’s release of the official list of eligible low-income tracts. Below you will find a tentative timeline for OEDIT activities related to the selection process:

• Fall 2025-Spring 2026: Educational webinars provided at various stages in the process, with the ultimate goal of encouraging local feedback on zone designation.
• Spring 2026: Regional convenings provided at various stages in the process, with the ultimate goal of encouraging local feedback on zone designation.
• May 2026: OEDIT releases three tools (more information is provided in May 2026 Program Update and Release of Public Engagement Tools):
  • OZ 2.0 Designation Input Form
  • OZ 2.0 Designation Index (XLSX)
  • OZ 2.0 Designation GIS Tool 
• June 30, 2026: Deadline for providing feedback to OEDIT on zone designation via the Input Form
• July 1, 2026: Beginning of 90-day designation period for Governor Polis to submit nominations for OZ 2.0 to the U.S. Treasury.
• January 1, 2027: New OZs made official, designated for a 10-year period, January 1, 2027 - December 31, 2036.

Updates & Changes to the Colorado Opportunity Zone Program from H.R. 1

Federal bill H.R. 1 makes the Colorado Opportunity Zone Program permanent and includes several other key changes:

• Makes the OZ program permanent: H.R. 1 makes the OZ incentive permanent and requires that OZs be redesignated every 10 years as eligibility data is updated.
• Creates new reporting requirements: H.R. 1 creates new reporting requirements for Qualified Opportunity Funds and directs the U.S. Treasury to publish annual reports on OZ investment activity and outcomes, providing greater transparency around the impact of the program.
• Introduces a new incentive structure: H.R. 1 simplifies the incentive structure with a five-year rolling deferral starting on the date of investment, coupled with a 10 percent step up in basis for investments held for five years.
• Establishes new eligibility criteria:
  • Defines low-income communities as census tracts that have either 1) a median family income below 70% of the state (for non-metro areas) or metro (for metro areas) median or 2) a poverty rate of 20% or greater plus a median family income below 125% of the state or metro median.
  • Eliminates the “contiguous tracts” exception from the first iteration of the program.
• Enhances the incentive for investment in rural OZs:
  • Defines a “rural area” as any area other than 1) a city or town with a population of greater than 50,000 and 2) an urbanized area adjacent to a city or town with a population in excess of 50,000.
  • Provides a 30 percent step-up benefit for investments in a rural OZ.
  • Reduces the “substantial improvement” threshold for qualifying projects in rural OZs from 100% to 50%.

For more detailed information on the changes and impacts of H.R. 1, the Economic Innovation Group has published an in-depth review: Opportunity Zones 2.0: Where Things Stand After the One Big Beautiful Bill Act.

Opportunity Zones in Rural Areas

The U.S. Treasury recently released guidance around the H.R. 1 definition of rural areas that applies to opportunity zones that will be designated under the second iteration of the program as well as existing opportunity zones that are currently open for investment. A rural area is now defined as any area other than a city or town with a population greater than 50,000, and any urbanized area contiguous and adjacent to a city or town with a population greater than 50,000.

As noted above, there is a reduced substantial improvement requirement for opportunity zones located in rural areas as defined by H.R. 1, and, importantly, this reduced requirement is now available for investments made in existing opportunity zones. According to the U.S. Treasury’s guidance, the following opportunity zones under the first iteration of the program meet the new rural definition. Review the IRS Notice 2025-50 for more information.