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 1 - GENERAL (§§ 39-22-101 — 39-22-130) › Section 39-22-121 - Credit for child care facilities - legislative declaration - definitions - repeal

(1)
Repealed.
(1.5)
For income tax years commencing prior to January 1, 2028, any taxpayer who makes a monetary contribution to promote child care in the state is allowed a credit against the income tax imposed by this article 22 in an amount equal to fifty percent of the total value of the contribution except as otherwise provided in subsections (5) and (6.7) of this section.
(1.7)
As used in this section, unless the context otherwise requires, "child care" means care provided to a child twelve years of age or younger.
(2)
Monetary contributions to promote child care in the state include the following types of contributions:
(a)
Donating money for the establishment or operation of a child care facility that uses the donation to provide child care, a child care program that is not a child care facility but provides child care services similar to those provided by a child care center, as defined in sections
26-6-903
and
26.5-5-303
, or any other program that received donations for which a credit was allowed to the donor pursuant to this section for any income tax year that ended before January 1, 2004, in the state;
(b)
Donating money to establish a grant or loan program for a parent or parents in the state requiring financial assistance for child care;
(c)
Pooling money of several businesses and donating the money for the establishment of a child care facility in the state;
(d)
Donating money for the training of child care providers in the state; and
(e)
Donating money for the establishment of an information dissemination program in the state to provide information and referral services to assist a parent or parents in obtaining child care.
(3)
In no event shall credits be allowed pursuant to this section for contributions that are not directly related to promoting child care in the state or for contributions that a taxpayer makes to a child care facility in which the taxpayer or a person related to the taxpayer has a financial interest.
(4)
When a contribution for which a credit is claimed pursuant to this section is made to a for-profit business, such contribution shall be directly invested by the business for the acquisition or improvement of facilities, equipment, or services, including the improvement of staff salaries, staff training, or the quality of child care.
(5)
The credit allowed by this section shall not exceed one hundred thousand dollars or the taxpayer's actual income tax liability for the tax year for which the credit is claimed, whichever is less.
(6)
If the amount of the credit allowed pursuant to the provisions of this section exceeds the amount of income taxes otherwise due on the taxpayer's income in the income tax year for which the credit is being claimed, the amount of the credit not used as an offset against income taxes in said income tax year may be carried forward and used as a credit against subsequent years' income tax liability for a period not to exceed five years and shall be applied first to the earliest income tax years possible. Any credit remaining after said period shall not be refunded or credited to the taxpayer.
(6.5)
As used in this section, "child care facility" means:
(a)
Any facility required to be licensed pursuant to part 9 of article
6
of title
26
or part 3 of article
5
of title
26.5
and must include, but is not limited to:
(I)
Child care centers;
(II)
Child placement agencies;
(III)
Family child care homes;
(IV)
Foster care homes;
(V)
Homeless youth shelters;
(VI)
Residential child care facilities; and
(VII)
Secure residential treatment centers; and
(b)
For income tax years commencing on and after January 1, 2013, any approved facility school as such term is defined in section
22-2-402 (1)
, C.R.S., that is also affiliated with a licensed or certified hospital in the state and is also a nonprofit organization; except that, subject to the limitations specified in subsections (5) and (6) of this section and paragraph (d) of subsection (6.7) of this section, any credit for a monetary contribution made to an approved facility school in the income tax year commencing on or after January 1, 2013, but before January 1, 2014, shall not be claimed until the income tax year commencing on or after January 1, 2014.
(6.7)
(a)
If the revenue estimate prepared by the staff of the legislative council in December 2010 and December 2011 indicates that the amount of the total general fund revenues for that particular fiscal year will not be sufficient to grow the total state general fund appropriations by six percent over such appropriations for the previous fiscal year, then the credit authorized in this section shall not be allowed for any income tax year commencing during the calendar year following the year in which the estimate is prepared; except that any taxpayer who would have been eligible to claim a credit pursuant to this section in the income tax year in which the credit is not allowed shall be allowed to claim the credit earned in such income tax year in the next income tax year in which the estimate indicates that the amount of the total general fund revenues will be sufficient to grow the total state general fund appropriations by six percent over such appropriations for the previous fiscal year.
(b)
The department of revenue shall, through its website, specify on or before January 1, 2011, and January 1, 2012, whether the credit authorized in this section shall be allowed for a given income tax year pursuant to paragraph (a) of this subsection (6.7).
(c)
Notwithstanding any other provision, and subject to the limitations in subsections (5) and (6) of this section, in the income tax year commencing on January 1, 2013, a taxpayer may claim no more than fifty percent of any credit allowed pursuant to subsection (1.5) of this section and paragraph (a) of this subsection (6.7) and any credit carried forward pursuant to subsection (6) of this section. The remainder of all credits allowed as described in this paragraph (c) shall be carried forward to the income tax year commencing January 1, 2014.
(d)
Notwithstanding any other provision, and subject to the limitations in subsections (5) and (6) of this section, in the income tax year commencing on January 1, 2014, a taxpayer may claim no more than seventy-five percent of any credit allowed pursuant to subsection (1.5) of this section and any credit carried forward pursuant to subsection (6) of this section and paragraph (c) of this subsection (6.7). The remainder of all credits allowed as described in this paragraph (d) shall be carried forward to the income tax year commencing January 1, 2015.
(6.8)
(a)
In accordance with section
39-21-304 (1)
, which requires each bill that extends a tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration if one was not previously included in the tax expenditure, the general assembly finds and declares that the general purpose of this tax expenditure is intended to induce certain designated behavior by taxpayers. Specifically, this tax expenditure is intended to encourage taxpayers to make donations that promote child care.
(b)
The general assembly and the state auditor shall measure the effectiveness of the tax credit in achieving the purposes specified in subsection (6.8)(a) of this section based on the number and value of credits that are claimed. For income tax years commencing on or after January 1, 2024, in order to allow the general assembly and the state auditor to measure the effectiveness of the credit, the department of revenue, when administering the credit, shall collect, at a minimum, the following information about the taxpayer's contribution to promote child care:
(I)
The contribution amount;
(II)
The person to whom the taxpayer made the contribution;
(III)
The type of contribution made pursuant to subsection (2) of this section;
(IV)
The type of child care facility and programs to which the taxpayer made the contribution; and
(V)
The county in which the person receiving the donation is located.
(c)
The department of revenue shall consult with the early childhood leadership commission created in section
26.5-1-302
, the public-private collaboration unit in the department of personnel created in section
24-94-103 (2)
, and the department of early childhood created in section
26.5-1-104 (1)
to study possible improvement to the tax credit allowed pursuant to this section and to develop recommendations for further measuring the effectiveness of the tax credit. On or before July 31, 2024, the department of revenue shall deliver to the joint budget committee, the finance committees of the senate and the house of representatives, and the office of the state auditor the recommendations developed pursuant to this subsection (6.8)(c). In addition to recommendations for further measuring the effectiveness of the tax credit, the recommendations must include recommendations for:
(I)
Improving the structure, oversight, and administration of the tax credit;
(II)
Developing mechanisms to inform taxpayers and eligible child care facilities and programs about the availability of the tax credit;
(III)
Ensuring the tax credit is equitably promoting child care in all communities; and
(IV)
Allowing donations of in-kind real property to qualify as an eligible contribution to promote child care.
(d)
In the income tax year commencing January 1, 2026, the state auditor shall prepare a tax expenditure evaluation report pursuant to section
39-21-305
for the tax credit specified in this section. In accordance with section
39-21-305 (1)(e)
, the state auditor shall post the report on the general assembly's website and deliver the report to the joint budget committee and the finance committees of the senate and the house of representatives no later than September 15, 2026.
(7)
This section is repealed, effective January 1, 2035.
Amended by 2023 Ch. 241,§ 1, eff. 8/7/2023.
Amended by 2022 Ch. 123, § 129, eff. 7/1/2022.
Amended by 2021 Ch. 54, § 1, eff. 9/7/2021.
Amended by 2018 Ch. 327, § 1, eff. 8/8/2018.
L. 98: Entire section added, p. 1370, § 1, effective August 5. L. 2000: (1) amended and (1.5) added, p. 678, § 2, effective May 23. L. 2004: (1.7) added and (2)(a) and (7) amended, p. 84, § 1, effective March 9. L. 2008: (2)(a) and (7) amended and (6.5) and (6.7) added, p. 2269, § 1, effective August 5. L. 2009: (6.7)(a) amended, (SB 09-228), ch. 2265, p. 2265, § 18, effective July 1. L. 2011: (1.5) and (6.7) amended, (HB 11-1014), ch. 1080, p. 1080, § 1, effective August 10. L. 2012: (6.5) amended, (HB 12-1273), ch. 1424, p. 1424, § 2, effective August 8. L. 2016: (2)(a) amended, (SB 16-189), ch. 210, p. 794, § 109, effective June 6. L. 2018: (1.5) and (7) amended, (HB 18-1004), ch. 1965, p. 1965, § 1, effective August 8. L. 2021: (1) repealed and IP(2), (2)(a), (2)(c), (2)(e), and (5) amended, (HB 21 -1154), ch. 226, p. 226, § 1, effective September 7.
2023 Ch. 241, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2021 Ch. 54, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
For the legislative declaration in the 2012 act amending subsection (6.5), see section 1 of chapter 270, Session Laws of Colorado 2012.