DENVER, CO - On January 1, a new law goes into effect to expand the state Earned Income Tax Credit and Child Tax Credit, putting more money back into the pockets of hardworking Coloradans. HB23-1008 also goes into effect, closing tax loopholes in order to expand access to healthy foods in lower-income and under-served communities and help small food retailers and small family farms.
“This bipartisan new law will put $170 million dollars back into the pockets of hardworking families,” said Rep. Shannon Bird, D-Westminster, sponsor of HB23-1112. “These tax credits will boost the incomes of hundreds of thousands of Coloradans and help vulnerable families afford basic necessities as we continue to tackle the high cost of living in our state. I’m proud of our efforts to create a more fair tax system that supports the Coloradans who need it the most.”
“Colorado’s working families deserve a break,” said Sen. Chris Hansen, D-Denver. “These critical tax credits will put more money in their pockets, and make it easier to pay for necessities like groceries and rent. I’m proud to champion this legislation that will lift folks out of poverty and will make life easier for Colorado families.”
“This law will put more money back into the pockets of hardworking Coloradans, boosting our local economies,” said Rep. Mary Young, D-Greeley, sponsor of HB23-1112. “These extra dollars could make a world of difference for low-income working people. I’m proud that the legislature came together in a bipartisan way to reduce taxes for working families and boost the incomes of the Coloradans who are feeling the brunt of our cost of living crisis.”
“Boosting tax credits for hardworking Colorado families just makes sense,” said Sen. Chris Kolker, D-Centennial. “This new law eases the burden people across our state face, and will help them build better futures for themselves and their families. I am proud to see this critical support go into effect, and look forward to the benefits and security it will bring to working families all across Colorado.”
HB23-1112 expands the state Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) and returns nearly $170 million more to hardworking families. The law increases the Colorado EITC from 25 percent to 38 percent of the federal EITC for tax year 2024, an almost four-fold increase from where it stood in 2020. By increasing the EITC and CTC, families will see hundreds of additional dollars back in their wallets. During the 2023 special legislative session, Colorado Democrats also passed HB23B-1002, which increased the state EITC for tax year 2023 from 25 to 50 percent, one of the highest state matches in the country.
A refundable tax credit available to certain families with children under the age of 6, the Colorado Child Tax Credit will now range from $200 to $1,200 depending on income and filing status starting in tax year 2024, with the tax credit ranging from 20 to 70 percent of the federal CTC depending on marital status, number of qualifying children and income.
The federal Child Tax Credit has lifted over 57,000 Colorado kids out of poverty and helped over 630,000 families across the state, while the federal Earned Income Tax Credit has helped cut the national poverty rate in half.
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 at the time doubled the state's Earned Income Tax Credit and funded the Child Tax Credit, saving hundreds of thousands of Colorado families money.
“All Coloradans deserve access to healthy and nutritious foods, and with this law going into effect, more lower-income and underserved Coloradans will more easily be able to access locally sourced foods,” said Rep. Mike Weissman, D-Aurora, sponsor of HB23-1008. “One in three adults living with children have reported missing meals or eating smaller portions so they can provide their kids with enough food. We’re ending a tax loophole that benefited wealthy corporations to connect everyday Coloradans with fresh produce and groceries and support our small Colorado farmers and food producers.”
“Working people in my district and across the state don’t get a tax break on their lunches, and too many of them don’t have enough to eat at all," said Senator Rhonda Fields, D-Aurora. “I am happy to close this tax loophole that only benefits the wealthiest Coloradans, and redirect the funds toward addressing food insecurity so that more Coloradans can afford to put food on the table.”
“Family owned farms and food retailers need our support more than corporate boardrooms," said Senator Nick Hinrichsen, D-Pueblo. “This new law will reduce hunger and strengthen local supply chains in urban and rural parts of Colorado, with a minimal impact on state finances.”
For income tax years 2024 through 2030, HB23-1008 ends the state tax loophole that allows corporations to deduct business meal expenses from their taxes. Ending these tax deductions supports efforts to reduce food insecurity for hard-working Coloradans and fund a tax credit to help our local farmers and food retailers acquire necessary equipment and better access market opportunities. HB23-1008 creates an income tax credit for small food retailers and small family farms worth up to 85% of the cost of new systems, equipment, and food distribution for tax year 2024 and 75% of the costs for subsequent tax years. Partnerships between Colorado food producers and small retailers boost revenue and cycle money into local economies.
This law builds off HB22-1380, a bipartisan law passed by the General Assembly in 2022 to save Coloradans money on healthy foods. The funding allocated by the 2022 legislation supports programs including the Community Nutrition Incentive Program, which assists women, children, and older Coloradans in subscribing to weekly produce deliveries from a local farm; the Double Up Food Bucks Program, which doubles the value of SNAP benefits in participating markets and stores for fruits and vegetables; and the Community Food Access program, which allows more small retailers to acquire equipment to store and sell produce and supports small family farms in connecting their crops to market demands.
On August 8, 2023, $250,000 was allocated by this law to the Department of Public Health and Environment to connect low-income communities throughout the state with healthy eating program incentives and improve access to fresh, Colorado-grown produce.