2023 Colorado Revised Statutes › Title 39 - TAXATION (§§ 39-1-101 — 39-37-301) › SPECIFIC TAXES (§§ 39-20-101 — 39-37-301) › INCOME TAX (§§ 39-22-101 — 39-22-5508) › Article 22 - Income Tax (§§ 39-22-101 — 39-22-5508) › Part 5 - SPECIAL RULES (§§ 39-22-501 — 39-22-570) › Section 39-22-547 - [Effective 8/7/2024] [Repealed Effective 12/31/2030] Early childhood educator income tax credit - tax preference performance statement - legislative declaration - definitions - repeal

(1)
(a)
The general assembly finds and declares that:
(I)
The benefits of quality child care and early childhood education are well documented and a striking connection exists between children's learning experiences well before kindergarten and their later school success;
(II)
Small business owners and parents who rely on child care to work would also experience lower turnover in child care staff when early childhood educators experience better economic stability; and
(III)
When early childhood educators improve the quality of their education by receiving early childhood professional credentials or attaining higher credential levels, it improves the quality of children's early learning experiences.
(b)
In accordance with section
39-21-304 (1)
, the purpose of this tax expenditure is to:
(I)
Induce certain designated behavior by taxpayers, which in this instance is for early childhood educators to receive an early childhood professional credential or to attain higher credential levels; and
(II)
Provide tax relief for early childhood educators.
(c)
The general assembly and the state auditor shall measure the effectiveness of the credit in achieving the purpose specified in subsection (1)(b)(I) of this section based on a comparison of the number of early childhood professional credentials at the various levels before and with the credit.
(d)
The general assembly and the state auditor shall measure the effectiveness of the credit in achieving the purpose specified in subsection (1)(b)(II) of this section based on the number of credits that are claimed.
(2)
As used in this section, unless the context otherwise requires:
(a)
"Department" means the department of revenue.
(b)
"Early childhood professional credential" means the early childhood professional credentials issued by the department of education, or a successor department, and designated as early childhood professional I, early childhood professional II, early childhood professional III, early childhood professional IV, early childhood professional V, and early childhood professional VI.
(c)
"Eligible early childhood educator" means an individual who:
(I)
Has a federal adjusted gross income less than or equal to seventy-five thousand dollars for an individual filing a single return, or has a federal adjusted gross income less than or equal to one hundred fifty thousand dollars for an individual filing a joint return;
(II)
Holds an early childhood professional credential for at least part of the income tax year for which the credit is claimed; and
(III)
For at least six months of the income tax year for which the credit is claimed, is either the licensee of an eligible program or employed by an eligible program.
(d)
"Eligible program" means either an early childhood education program as defined in section 26.5-2-202 (3) or a licensed family child care home. An eligible program must have held at least a level one quality rating pursuant to the Colorado shines quality rating and improvement system established in section 26.5-5-101 for the income tax year for which the credit is claimed.
(e)
"Family child care home" has the same meaning as set forth in section
26.5-5-303 (7)
.
(f)
"Inflation" means the annual percentage change in the United States department of labor's bureau of labor statistics consumer price index for Denver-Aurora-Lakewood for all items paid by all urban consumers, or its applicable successor index.
(3)
(a)
For income tax years commencing on or after January 1, 2022, but before January 1, 2026, an eligible early childhood educator is allowed a credit against the tax imposed by this article 22 in an amount as set forth in subsection (3)(b) of this section.
(b)
(I)
Except as provided in subsection (3)(b)(II) of this section, the amount of the credit equals, for:
(A)
Seven hundred fifty dollars for an early childhood professional I;
(B)
One thousand dollars for an early childhood professional II; and
(C)
One thousand five hundred dollars for an early childhood professional III, early childhood professional IV, early childhood professional V, or early childhood professional VI.
(II)
For the income tax years commencing on or after January 1, 2023, the department shall adjust the credit amounts set forth in subsection (3)(b)(I) of this section to reflect inflation for each income tax year in which the credit described in this section is allowed.
(c)
Each eligible early childhood educator is only allowed one credit per income tax year, even if the eligible early childhood educator earns a higher level early childhood professional credential in the same year. In such case, the eligible early childhood educator's credit is based on the highest early childhood professional credential attained during the income tax year.
(4)
The amount of the credit under this section that exceeds the eligible early childhood educator's income taxes due is refunded to the eligible early childhood educator.
(5)
No later than January 1, 2023, and each January 1 thereafter through January 1, 2026, the department of human services, or a successor department, shall provide the department of revenue with an electronic report of each individual who held an early childhood professional credential during the previous calendar year for which the credit is allowed. The department shall include the following information in the report, if available:
(a)
The name of the individual who holds the early childhood professional credential;
(b)
The individual's social security number or tax identification number;
(c)
The highest level of early childhood professional credential held by the individual during the year; and
(d)
The length of time that the individual held an early childhood professional credential at any level.
(6)
This section is repealed, effective July 1, 2030.
Amended by 2024 Ch. 490,§ 82, eff. 8/7/2024.
Amended by 2023 Ch. 303,§ 86, eff. 8/7/2023.
Added by 2022 Ch. 347, § 2, eff. 8/10/2022.
2024 Ch. 490, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2023 Ch. 303, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2022 Ch. 347, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
This section is set out more than once due to postponed, multiple, or conflicting amendments.