EARNED INCOME TAX CREDIT (EITC)

Rate (Fully Refundable):

• 10% of the federal credit ¹
• 15% of the federal credit, beginning in tax year 2022

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 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.

Notes:

• 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
  • Incomes up to $25,000: 30% of federal CTC
  • Incomes between $25,001 and $50,000: 15% of federal CTC
  • Incomes between $50,001 and $75,000: 5% of federal CTC

• For married couples filing jointly:
  • Incomes up to $35,000: 30% of federal CTC
  • Incomes between $35,001 and $60,000: 15% of federal CTC
  • Incomes between $60,001 and $85,000: 5% 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: 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.

Notes: As of 2016, the CTC is not available because marketplace fairness legislation has not been passed at the federal level.

CHILD AND DEPENDENT CARE TAX CREDIT (CDCTC)

Rates (Fully-Refundable):³

• 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
• For filers earning up to $25,000: 50% 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: The credit cannot exceed $525 for one child or $1,050 for two or more children.