HB 18-1208

House Bill 18-1208, which has been signed into law, increases tax credits for child care expenses. Currently, Colorado residents with a federal adjusted gross income of up to $60,000 can get state tax credits based on their federal credit amount. The bill expands this benefit by raising the income limit to $150,000 and increasing the percentage of the federal credit that counts as a state credit to 80% for those who qualify under the new higher threshold. This change helps more families afford child care costs but limits the tax refund for those with higher incomes. Since it has been signed, this bill is now law and affects Colorado residents seeking tax relief for their child care expenses.

Official Summary

Currently, a resident individual with a federal adjusted gross income of $60,000 or less is allowed a state income tax credit (state credit) for child care expenses that is a percentage of a similar federal income tax credit claimed (federal credit). The amount of the state credit depends on the individual's adjusted gross income (AGI). If the individual's AGI is: $25,000 or less, then the state credit is 50% of the federal credit; $25,001 to $35,000, then the state credit is 30% of the federal credit; and $35,001 to $60,000, then the state credit is 10% of the federal credit. The bill expands the state credit by allowing a resident individual with an AGI that is less than or equal to $150,000 to claim a credit that is equal to 80% of the individual's federal credit. For a taxpayer who is eligible for the credit due to the increased income threshold, the state credit is not refundable but may be carried forward up to 5 income tax years. The bill makes an appropriation. (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.) , Read More

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