Higher Tax Credits Coming Soon for Hardworking Coloradans

DENVER, CO - The House Finance Committee today passed legislation to put more money back into the pockets of hardworking Coloradans by increasing the state Earned Income Tax Credit for tax year 2023. The bill passed committee by a vote of 7-4.

“Our bill will put hard-earned money back into the pockets of 400,000 hardworking Colorado families,” said Rep. Jenny Willford, D-Northglenn. “Increasing the Earned Income Tax Credit provides a significant boost to working-class families struggling to buy their children clothing, afford groceries, and otherwise support their families. We’re saving Colorado families money, lifting more families out of poverty, and boosting our local economies.”

“Hundreds of dollars in savings can be the difference between missing meals and being able to put food on the table for your family,” said Rep. Mary Young, D-Greeley. “Our kids perform best in school when they have stable housing and reliable meals. The Earned Income Tax Credit is proven to improve family health and education outcomes, improve child nutrition, and boost parents’ take-home earnings so they can build a better future for themselves and their families.”

HB23B-1002 would expand the state Earned Income Tax Credit (EITC) for tax year 2023 to one of the highest state matches in the country. With the current state EITC at 25 percent, the average state-level EITC is $521. By increasing the EITC, families could see hundreds of additional dollars back in their wallets next year.

The bill builds on legislation passed by Colorado Democrats in recent years to make Colorado more affordable for working-class families. The General Assembly passed HB20-1420 and HB21-1311, which more than doubled the state's EITC and funded the Child Tax Credit for the first time in Colorado, saving hundreds of thousands of Colorado families money.

Additionally, Colorado Democrats passed HB23-1112 last session to increase the Colorado EITC from 25 percent to 38 percent of the federal EITC for tax year 2024. The bill’s demographic note showed that EITC recipients were more likely to be women, people of color, and people living with disabilities.