DENVER, CO - The House today passed legislation on a preliminary vote to put more money back into the pockets of hardworking Coloradans by expanding the Earned Income Tax Credit and Child Tax Credit.
“This legislation will increase the Earned Income and Child Tax Credits, putting thousands of dollars back into the pockets of hardworking people and lifting Coloradans out of poverty,” said Rep. Shannon Bird, D-Westminster. “Coloradans deserve a tax code that boosts their incomes and helps them build a better future for themselves and their families, and that’s exactly what this legislation does. We’re building on our work to increase tax benefits and to refund surplus state revenue in a way that helps all Coloradans thrive.”
HB23-1112 expands the state Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) and will return nearly $600 million more to hardworking families. Starting in tax year 2024, the Colorado EITC would increase from 25 percent to 40 percent of the federal EITC, a four fold increase from where it stood in 2020. Under the bill, the Colorado CTC increases by 10 percent, with the tax credit ranging from 20 to 70 percent of the federal CTC depending on marital status, number of qualifying children, and federal adjusted gross 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. This session, Colorado Democrats passed HB23-1006 to require employers to provide information about federal and state earned income tax credits and child tax credits to their employees, spreading awareness to Colorado families that qualify for these tax credits to save them thousands of dollars.