Continuation of Child Care Contribution Tax Credit

HOUSE BILL 26-1004
BY REPRESENTATIVE(S) McCluskie and Caldwell, Boesenecker,
Bradfield, Camacho, Clifford, Gilchrist, Lindsay, Lukens, Martinez,
McCormick, Stewart K., Stewart R., Titone, Velasco, Zokaie, Bacon,
Brown, Carter, Duran, Froelich, Gonzalez R., Hamrick, Jackson, Lieder,
Mauro, Nguyen, Paschal, Rutinel, Rydin, Sirota, Smith, Story;
also SENATOR(S) Coleman and Simpson, Bright, Jodeh, Kipp, Marchman,
Pelton B., Pelton R., Amabile, Ball, Benavidez, Bridges, Cutter, Daugherty,
Exum, Gonzales J., Kolker, Lindstedt, Mullica, Roberts, Snyder, Sullivan,
Wallace, Weissman.
CONCERNING A CONTINUATION OF THE INCOME TAX CREDIT FOR A
QUALIFYING CONTRIBUTION TO PROMOTE CHILD CARE IN THE STATE.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Legislative declaration. ( 1) The general assembly
finds and declares that:
(a) A robust child care and education ecosystem is critical for
Colorado's economy and the health and well-being of Colorado's children;
(b) The child care contribution tax credit has been an essential
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act.
source of funding for child care facilities throughout Colorado since 1998,
allowing individuals and corporations who make charitable contributions
to child care facilities to receive 50% of their donations back in tax credits;
( c) In 2022, the child care contribution tax credit benefitted
approximately 18,000 Coloradans, who received additional revenue on their
tax returns and generated $60 million for child care providers;
( d) Throughout Colorado, child care providers use the child care
contribution tax credit to open new child care centers in child care deserts,
enroll families with low incomes who would otherwise be unable to access
care, and recruit and retain staff;
( e) The child care contribution tax credit supports the Colorado
economy by empowering local businesses and supporting salaries for child
care providers; and
(f) In the face of uncertain federal support and a challenging state
budget environment, renewing the child care contribution tax credit for 10
years is critical to support Colorado child care and after-school providers,
families, and local economies.
SECTION 2. In Colorado Revised Statutes, 39-22-121, amend
(1.5), (6.8)(a), and (7); and repeal (6.8)(c) as follows:
39-22-121. Credit for child care facilities -legislative declaration
-definitions - repeal.
(1.5) For income tax years commencing prior to January 1, 2028
JANUARY 1, 2038, any taxpayer who makes a monetary contribution to
promote child care in the state is allowed a credit against the income tax
imposed by this article 22 in an amount equal to fifty percent of the total
value of the contribution, except as otherwise provided in subsections (5)
and (6.7) of this section.
(6.8) (a) In accordance with section 39-21-304 (1), which requires
each bill that extends a tax expenditure to include a AMEND THE tax
preference performance statement as THAT IS part of a THE statutory
legislative declaration if one ""as not previously included in OF the tax
expenditure, the general assembly finds and declares that the general
PAGE 2-HOUSE BILL 26-1004
purpose of this tax expenditure is intended to induce certain designated
behavior by taxpayers Specifically, AND THAT this tax expenditure is
SPECIFICALLY intended to encourage taxpayers to make donations that
promote child care IN THE ST A TE.
( c) The department oft c v cnuc shall consult with the ca1 ly childhood
leadc1ship commission c1catcd in section 26.5-1-302, the public-piivatc
collaborntion unit in the department of pc1sonnel c1catcd in section
24-94-103 (2), and the department of cady childhood c1catcd in section
26.5-1-104 (1) to study possible imprnvcmcnt to the tax c1cdit allowed
pmsuant to this section and to develop 1ccommcndations fut fu1thc1
mcasm ing the cffecti v cncss of the tax c1 edit. On 01 bcfu1 c July 31, 2024,
the departnxcnt of1cvcnuc shall dcli~c1 to the joint budget committee, the
finance committees of the senate and the house of I ep1 cscntati v cs, and the
office of the state auditm the 1ccommcndations developed pmsuant to this
subsection (6.S)(c). In addition to 1ccommcndations fut furthc1 nrcasming
the cffccti~ cncss of the tax c1 edit, the I ccommcndations must include
1 ccommcndations fut .
(I) Imprnving the stmctmc, ovc1sight, and administrntion of the tax
c1cdit,
(11) Developing mechanisms to infu1m taxpayc1s and eligible child
ca1c facilities and prngrnms about the availability of the tax c1cdit,
(Ill) Ensm ing the tax c1 edit is equitably prnmoting child cat c in all
communities, and
(IV) Allowing donations of in-kind I cal prnpcrey to qualify as an
eligible contdbution to prnmotc child ca1c.
(7) This section is repealed, effective January 1, 2035 JANUARY 1,
2045.
SECTION 3. Act subject to petition - effective date. This act
takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly (August
12, 2026, if adjournment sine die is on May 13, 2026); except that, if a
referendum petition is filed pursuant to section 1 (3) of article V of the state
constitution against this act or an item, section, or part of this act within
PAGE 3-HOUSE BILL 26-1004
such period, then the act, item, section, or part will not take effect unless
approved by the people at the general election to be held in November 2026
and, in such case, will take effect on the date of the official declaration of
the vote thereon by the governor.
J~
SPEAKER OF THE HOUSE
OF REPRESENTATIVES
v~~
Vanessa Reilly
CHIEF CLERK OF THE HOUSE
OF REPRESENTATIVES
James Rashad Coleman, Sr.
PRESIDENT OF
THE SENATE
Est er van Mourik
SECRETARY OF
THE SENATE
APPROVED <..">vi Thur:scf~J5 tY) ct\4 Z. 6-th 2o7--fc a,f (I: 3Octh'l
( ate and 'rime)
Jared
GOVE
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