Colorado Expands EITC to ITIN Filers

This week, Colorado Governor Jared Polis (D) signed legislation to increase the value of the state’s Earned Income Tax Credit (EITC) and make the credit more inclusive as part of a larger tax package.

The state’s EITC will increase from 10 to 15 percent of the federal credit beginning in 2022 and filers using Individual Taxpayer Identification Numbers (ITINs) will become eligible for the credit in tax year 2020 and beyond. The provisions were included in a larger bill geared towards making the state tax code fairer by decoupling from certain federal tax breaks for corporations and wealthy households and using the savings to fund an expanded EITC and other programs. Bill sponsors estimated that the legislation could raise roughly $180 million through year 2022-2023.

Colorado will become the first state to allow ITIN filers to claim the EITC – a move that is expected to boost income for up to 47,190 workers across the state. This is a major step towards making the EITC more inclusive for immigrant families, many of whom are barred from claiming the federal EITC, despite being considered one of the most vulnerable groups during an economic crisis. Colorado is also the first state to improve the EITC amid the COVID-19 pandemic, as the need for additional support for low-wage workers grows to an all-time high.

To learn more about other state-level tax credits across the country, visit our 50-state map here.