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 39-22-129 - Child tax credit - legislative declaration - definitions - repeal

(1)
(a)
The general assembly hereby finds and declares that:
(I)
The federal child tax credit, which includes the refundable portion of the credit commonly known as the additional child tax credit, supports low- and middle-income working families whose earnings are below an income threshold and who have children under seventeen years of age;
(II)
Since its establishment at the federal level in 1997, the credit has increased family income, reduced child poverty among families with children, and supported local economies; and
(III)
The credit has a positive impact on the early childhood development and health of children whose families gain income from the credit.
(b)
Now, therefore, it is the intent of the general assembly to establish a permanent and refundable state child tax credit for eligible Colorado taxpayers. The intended purpose of this credit is to support Colorado working families with young children, reduce child poverty, and to help Colorado's economy.
(2)
As used in this section:
(a)
(I)
"Eligible child" means, for income tax years commencing before January 1, 2024, a qualifying child for purposes of the federal child tax credit who is under six years of age at the end of the taxable year for which the credit is claimed.
(II)
"Eligible child" means, for income tax years commencing on or after January 1, 2024, a qualifying child, as defined in section 152 (c) of the internal revenue code, who is under six years of age at the end of the taxable year for which the credit is claimed.
(b)
"Federal child tax credit" means the child tax credit allowed under section 24 of the internal revenue code, or any successor section, and includes the refundable portion of the tax credit, which portion is referred to as the additional child credit.
(3)
(a)
Except as provided in subsection (4) of this section, for income tax years commencing on or after January 1, 2022, but before January 1, 2024, a resident individual who claims a federal child tax credit for an eligible child on the individual's federal tax return is allowed a child tax credit in the amount set forth in subsection (3)(b) or (3)(c) of this section against the income taxes due under this article 22 for the same tax year.
(b)
(I)
For a resident individual who files a single return, the amount of the credit is equal to:
(A)
Thirty percent of the federal child tax credit that the resident individual claimed on his or her federal tax return for each eligible child, if the individual's federal adjusted gross income is twenty-five thousand dollars or less;
(B)
Fifteen percent of the federal child tax credit that the resident individual claimed on his or her federal tax return for each eligible child, if the individual's federal adjusted gross income is greater than twenty-five thousand dollars but less than or equal to fifty thousand dollars; and
(C)
Five percent of the federal child tax credit that the resident individual claimed on his or her federal tax return for each eligible child, if the individual's federal adjusted gross income is greater than fifty thousand dollars but less than or equal to seventy-five thousand dollars.
(II)
A resident individual who files a single return and whose federal adjusted gross income is greater than seventy-five thousand dollars is not allowed a credit under this section.
(c)
(I)
For two resident individuals who file a joint return, the amount of the credit is equal to:
(A)
Thirty percent of the federal child tax credit that the resident individuals claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is thirty-five thousand dollars or less;
(B)
Fifteen percent of the federal child tax credit that the resident individuals claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is greater than thirty-five thousand dollars but less than or equal to sixty thousand dollars; and
(C)
Five percent of the federal child tax credit that the resident individuals claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is greater than sixty thousand dollars but less than or equal to eighty-five thousand dollars.
(II)
Two resident individuals who file a joint return and whose federal adjusted gross income is greater than eighty-five thousand dollars are not allowed a credit under this section.
(3.5)
(a)
Except as provided in subsection (4) of this section, for income tax years commencing on or after January 1, 2022, but before January 1, 2024, a resident individual who could have claimed a federal child tax credit for an eligible child on the individual's federal tax return had section 24 (h)(7) of the internal revenue code not applied to the definition of qualifying child, is allowed a child tax credit in the amount set forth in subsection (3.5)(b) or (3.5)(c) of this section against the income taxes due under this article 22 for the same tax year.
(b)
(I)
For a resident individual who files a single return, the amount of the credit is equal to:
(A)
Thirty percent of the federal child tax credit that the resident individual could have claimed on their federal tax return for each eligible child, if the individual's federal adjusted gross income is twenty-five thousand dollars or less;
(B)
Fifteen percent of the federal child tax credit that the resident individual could have claimed on their federal tax return for each eligible child, if the individual's federal adjusted gross income is greater than twenty-five thousand dollars but less than or equal to fifty thousand dollars; and
(C)
Five percent of the federal child tax credit that the resident individual could have claimed on their federal tax return for each eligible child, if the individual's federal adjusted gross income is greater than fifty thousand dollars but less than or equal to seventy-five thousand dollars.
(II)
A resident individual who files a single return and whose federal adjusted gross income is greater than seventy-five thousand dollars is not allowed a credit under this section.
(c)
(I)
For two resident individuals who file a joint return, the amount of the credit is equal to:
(A)
Thirty percent of the federal child tax credit that the resident individuals could have claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is thirty-five thousand dollars or less;
(B)
Fifteen percent of the federal child tax credit that the resident individuals could have claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is greater than thirty-five thousand dollars but less than or equal to sixty thousand dollars; and
(C)
Five percent of the federal child tax credit that the resident individuals could have claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is greater than sixty thousand dollars but less than or equal to eighty-five thousand dollars.
(II)
Two resident individuals who file a joint return and whose federal adjusted gross income is greater than eighty-five thousand dollars are not allowed a credit under this section.
(4)
In any income tax year commencing on or after January 1, 2022, but before January 1, 2024, if the changes specified in section 9611 of the "American Rescue Plan Act of 2021", Pub.L. 117-2, are no longer applicable to the federal child tax credit allowed in section 24 of the internal revenue code, then the amount of the child tax credit allowed in this section is as follows:
(a)
(I)
For a resident individual who files a single return, the amount of the credit is equal to:
(A)
Sixty percent of the federal child tax credit that the resident individual claimed or could have claimed on their federal tax return for each eligible child, if the individual's federal adjusted gross income is twenty-five thousand dollars or less;
(B)
Thirty percent of the federal child tax credit that the resident individual claimed or could have claimed on their federal tax return for each eligible child, if the individual's federal adjusted gross income is greater than twenty-five thousand dollars but less than or equal to fifty thousand dollars; and
(C)
Ten percent of the federal child tax credit that the resident individual claimed or could have claimed on their federal tax return for each eligible child, if the individual's federal adjusted gross income is greater than fifty thousand dollars but less than or equal to seventy-five thousand dollars.
(II)
A resident individual who files a single return and whose federal adjusted gross income is greater than seventy-five thousand dollars is not allowed a credit under this section.
(b)
(I)
For two resident individuals who file a joint return, the amount of the credit is equal to:
(A)
Sixty percent of the federal child tax credit that the resident individuals claimed or could have claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is thirty-five thousand dollars or less;
(B)
Thirty percent of the federal child tax credit that the resident individuals claimed or could have claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is greater than thirty-five thousand dollars but less than or equal to sixty thousand dollars; and
(C)
Ten percent of the federal child tax credit that the resident individuals claimed or could have claimed on their federal tax return for each eligible child, if the individuals' federal adjusted gross income is greater than sixty thousand dollars but less than or equal to eighty-five thousand dollars.
(II)
Two resident individuals who file a joint return and whose federal adjusted gross income is greater than eighty-five thousand dollars are not allowed a credit under this section.
(4.5)
(a)
(I)
For income tax years commencing on or after January 1, 2024, a resident individual who files a single return is allowed a child tax credit against the income taxes due under this article 22 for each eligible child of the taxpayer in the following amounts:
(A)
One thousand two hundred dollars if the individual's federal adjusted gross income is twenty-five thousand dollars or less;
(B)
Six hundred dollars if the individual's federal adjusted gross income is greater than twenty-five thousand dollars but less than or equal to fifty thousand dollars; and
(C)
Two hundred dollars if the individual's federal adjusted gross income is greater than fifty thousand dollars but less than or equal to seventy-five thousand dollars.
(II)
For income tax years commencing on or after January 1, 2024, two resident individuals who file a joint return are allowed a child tax credit against the income taxes due under this article 22 for each eligible child of the taxpayer in the following amounts:
(A)
One thousand two hundred dollars if the individuals' federal adjusted gross income is thirty-five thousand dollars or less;
(B)
Six hundred dollars if the individuals' federal adjusted gross income is greater than thirty-five thousand dollars but less than or equal to sixty thousand dollars; and
(C)
Two hundred dollars if the individuals' federal adjusted gross income is greater than sixty thousand dollars but less than or equal to eighty-five thousand dollars.
(b)
(I)
A resident individual who files a single return and whose federal adjusted gross income is greater than seventy-five thousand dollars is not allowed a credit under this section.
(II)
Two resident individuals who file a joint return and whose federal adjusted gross income is greater than eighty-five thousand dollars are not allowed a credit under this section.
(5)
The amount of the credit allowed under this section that exceeds the resident individual's income taxes due is refunded to the individual.
(6)
In the case of a part-year resident, the credit allowed under this section is apportioned in the ratio determined under section
39-22-110 (1)
.
(7)
The credit allowed under this section is not considered to be income or resources for the purpose of determining eligibility for the payment of public assistance benefits and medical assistance benefits authorized under state law or for a payment made under any other publicly funded programs.
(8)
(a)
For income tax years commencing on or after January 1, 2025, the department of revenue shall adjust the federal adjusted gross income amounts set forth in this section to reflect inflation for each income tax year in which the credit described in this section is allowed if cumulative inflation since the last adjustment, when applied to the current limits, results in an increase of at least one thousand dollars when the adjusted limits are rounded to the nearest one thousand dollars.
(b)
As used in this subsection (8), "inflation" means the annual percentage change in the United States department of labor bureau of labor statistics consumer price index for Denver-Aurora-Lakewood for all items paid by all urban consumers, or its applicable successor index.
(9)
Subsections (3), (3.5), and (4) of this section and this subsection (9) are repealed, effective December 31, 2026.
Amended by 2023 Ch. 445,§ 2, eff. 8/7/2023.
Amended by 2021 Ch. 298, § 5, eff. 6/23/2021.
L. 2013: Entire section added, (SB 13-001), ch. 2229, p. 2229, § 4, effective August 7. L. 2021: (3)(a) and (4) amended and (3.5) added, (HB 21-1311), ch. 1773, p. 1773, § 5, effective June 23.
2023 Ch. 445, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
(1) In 2013, this section was added by the "Colorado Working Families Economic Opportunity Act of 2013". For the short title, see section 1 of chapter 381, Session Laws of Colorado 2013. (2) For the legislative declaration in HB 21-1311, see section 1 of chapter 298, Session Laws of Colorado 2021.