HB 23-1046

House Bill 23-1046, which has been signed into law, allows Colorado employers to receive a tax credit equal to 50% of the costs associated with paying employees who are on leave for adopting a child and hiring temporary help during this time. The maximum leave period eligible for the tax credit is 12 weeks per employee, but only if the employer has a written policy offering pre-adoption leave and the employee meets certain criteria, such as having been employed for at least one year and earning less than $80,000 in the previous year. This law will take effect on January 1, 2024, benefiting employees and employers who comply with its requirements.

Official Summary

Beginning January 1, 2024, an employer is allowed an income tax credit in an amount equal to 50% of the employer's expenses incurred from voluntarily paying: An employee during a period of leave for the purpose of adopting a child; and For temporary replacement help, if any, during an employee's pre-adoption. The maximum amount of pre-adoption leave for which an employer can claim the credit is 12 weeks per employee. To be eligible for the credit, an employer must have a written policy offering pre-adoption leave. The credit is limited to pre-adoption leave for employees who have been employed for at least one year and who for the preceding year earned less than $80,000. The credit does not include the cost of any compensation in addition to wages that an employer pays or provides to an employee. (Note: This summary applies to this bill as introduced.)

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