EARNED INCOME TAX CREDIT (EITC)

Rate (Fully Refundable):

• 38% of the federal credit, beginning in tax year 2024

Eligibility Requirements: All full-year and part-year Colorado residents who qualify for the federal EITC are automatically eligible, and Colorado residents filing with Individual Taxpayer Identification Numbers (ITINs) qualify for the state EITC.

Latest Legislative Action:

In 2023, lawmakers enacted HB23-1112, increasing the value of the EITC to 38 percent, beginning in tax year 2024.

Notes:

• In 2022, lawmakers enacted SB22-182, funding an education initiative to teach qualifying individuals how to file for tax credits, including the EITC. Additionally, the bill provides grants to local non-profits and services that assist low-income households with tax filing and other financial support.
• In 2021, HB21-1311 expanded the EITC from 15 percent to 20 percent of the federal credit. The bill also increases the EITC from 20 percent to 25 percent for the year 2023.
• In 2020, lawmakers enacted HB20-1420, increasing the value of the EITC to 15 percent, beginning in tax year 2022. The legislation also decouples the EITC’s eligibility requirements from the federal credit and allows ITIN filers to qualify for the credit.
• In 2013, lawmakers enacted SB 13-001, making the EITC permanent once the state had again reached a revenue surplus. In fiscal year 2014-2015, this legislative trigger was activated and the credit became available for the 2015 tax year.
• Colorado’s original state EITC enacted in 1999 was contingent upon the state having surplus revenue. Prior to changes to the law in 2013, the credit had not been paid out since 2001.¹
• Denver is one of four cities in the country to ever enact a local-level EITC, originally set at 20 percent of the federal credit. However, the credit was suspended indefinitely because of insufficient TANF funds.
• The law states that the credit is not to be considered as income or resources for the purpose of determining eligibility for public assistance and medical assistance benefits.

CHILD TAX CREDIT (CTC)

*Rates (Fully Refundable):²

• For individual filers (starting 2024):
  • Incomes up to $25,000: 60% of federal CTC
  • Incomes between $25,001 and $50,000: 30% of federal CTC
  • Incomes between $50,001 and $75,000: 10% of federal CTC

• For married couples filing jointly (starting 2024):
  • Incomes up to $35,000: 60% of federal CTC
  • Incomes between $35,001 and $60,000: 30% of federal CTC
  • Incomes between $60,001 and $85,000: 10% of federal CTC

Eligibility Requirements:

• A filer’s Adjusted Gross Income must be less than $60,000
• All qualifying children must be under the age of six.

Latest Legislative Action: In 2023, Gov. Jared Polis signed House Bill 23-1112, expanding the state CTC. Under the new legislation, the fully refundable state CTC was increased to up to $1,200.

Notes: 

• HB21-1311 repealed the conditional availability of the credit and allowed qualifying filers to claim the credit starting in 2022. The bill also extends eligibility to taxpayers filing with Individual Taxpayer Identification Numbers (ITINs). ³
• SB 13-001 tied the CTC to both federal and state marketplace fairness legislation, making its creation conditioned upon the passage of acts that would allow the state to collect taxes from online retailers.
• As of 2016, the CTC was not available because marketplace fairness legislation has not been passed at the federal level.

CHILD AND DEPENDENT CARE TAX CREDIT (CDCTC)

Rates (Fully-Refundable):⁴

• For filers earning up to $25,000: 50% of federal CDCTC
• For filers earning between $25,000 and $35,000: 30% of federal CDCTC
• For filers earning between $35,000 and $60,000: 10% of federal CDCTC

Eligibility Requirements:

• A filer’s Adjusted Gross Income must be less than $60,000
• A qualifying child must be under the age of 13.

Latest Legislative Action: During the 2014 legislative session, Gov. Hickenlooper (D) signed into law HB 1072, which allows filers with incomes under $25,000 who do not qualify for the federal CDCTC to claim a refundable credit for tax years 2014 – 2016.

Notes:

• Known as the Child Care Expenses Tax Credit.
• The credit cannot exceed $525 for one child or $1,050 for two or more children.