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Legislation raises Colorado’s EITC federal match by 25 percent
DENVER, CO – Governor Polis today signed legislation sponsored by Senators Chris Kolker, D-Centennial, and Rhonda Fields, D-Aurora, and Representatives Jenny Willford, D-Northglenn, and Mary Young, D-Greeley, that puts more money back into the pockets of hardworking Coloradans by increasing the state Earned Income Tax Credit (EITC) for tax year 2023.
HB23B-1002 expands 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 tax credit is $521. By increasing the EITC, families will see hundreds of additional dollars back in their wallets next year.
“During this special session, we were able to deliver critical assistance to the Coloradans that need it most,” said Kolker. “This targeted relief refunds $182 million in a more equitable way. I’m proud of our work to successfully double the Earned Income Tax Credit, which will ultimately help lower-income, working families put food on the table, pay rent, and take care of their essentials.”
“The Earned Income Tax Credit helps hardworking families that are the most at-risk for housing insecurity and poverty due to the rising cost of living in Colorado,” said Willford. “Boosting this credit will put more money back into the pockets of the people who need it most right now, who are disproportionately people of color, women, and people with a disability. Our legislation will bolster the economic security of the Coloradans feeling the brunt of our affordability crisis and make it easier for all Coloradans to call our state home.”
“Studies have shown us time and again that the Earned Income Tax Credit especially helps communities of color and renters – much like the communities I represent,” Fields said. “In my district alone, there are over 15,000 low-income, hardworking Coloradans who benefit from this credit – and I’m glad that we are able to deliver this relief in time for tax season.”
“This bill will boost the incomes of over 400,000 hardworking Colorado families, making it easier for them to afford rent, groceries, childcare, and other costs,” said Young. “Getting $182.5 million out to hardworking Coloradans will help grow our economy, support local business owners and enable more Coloradans to afford to live in Colorado.”
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.