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Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 26-0607.02 Pierce Lively x2059 HOUSE BILL 26-1240
House Committees Senate Committees
Finance
A BILL FOR AN ACT
CONCERNING THE REMOVAL OF TH E MAXIMUM AGE REQUIREMENT101
FOR THE STATE EARNED INCOME TAX CREDIT.102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
Under current law, only individuals of certain ages may qualify for
the federal or state earned income tax credit. The federal "American
Rescue Plan Act of 2021" temporarily lowered the minimum age
requirement and removed the maximum age requirement for the federal
earned income tax credit. In 2021, the lowered minimum age requirement
was adopted for the state earned income tax credit (credit) indefinitely.
HOUSE SPONSORSHIP
Rutinel and Zokaie,
SENATE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
For tax years commencing on or after January 1, 2028, the bill adopts the
removal of the maximum age requirement for the credit indefinitely. An
individual who claims the credit as a result of the bill may claim the credit
in an amount determined in the same manner as an individual who claims
the credit as a result of the prior adoption of the lowered minimum age
requirement.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. Legislative declaration.2
(1) The General Assembly finds and declares that:3
(a) Colorado's earned income tax credit is one of the state's most4
effective tools for supporting working families, reducing poverty, and5
encouraging workforce participation;6
(b) In recent years, the General Assembly has taken important7
steps to modernize and expand the earned income tax credit, including8
extending eligibility to younger workers who were previously excluded;9
(c) Fairness requires that Colorado's tax policy treat older working10
adults with the same respect and recognition afforded to younger workers;11
(d) Many Coloradans over the age of sixty-five remain active in12
the workforce, often out of financial necessity, and these older workers13
contribute to their communities, support local economies, and, in many14
cases, help sustain multigenerational households;15
(e) Under current law, age-based eligibility limits prevent many16
low- and moderate-income older workers from claiming the earned17
income tax credit, even though they meet the same income and work18
requirements as younger filers;19
(f) The disparity in who can claim the earned income tax credit20
creates an inequitable outcome in a program designed to reward work and21
support those with limited earnings;22
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(g) Aligning eligibility for the earned income tax credit across age1
groups completes the policy direction the General Assembly has already2
embraced by ensuring that the earned income tax credit operates as a3
consistent, work-based support for all eligible Coloradans, regardless of4
age;5
(h) Aligning eligibility for the earned income tax credit across age6
groups represents a modest and responsible fiscal investment;7
(i) The structure of the earned income tax credit ensures that8
benefits of the credit target low- and moderate-income workers and flow9
directly back into local communities through everyday spending;10
(j) Supporting older workers through the earned income tax credit11
helps promote financial stability, reduce reliance on more costly12
emergency assistance, and strengthen Colorado's economy; and13
(k) When working seniors and grandparents can better meet basic14
needs, entire families and communities benefit.15
SECTION 2. In Colorado Revised Statutes, 39-22-123.5, amend16
(3.5)(b)(I) and (3.5)(c) introductory portion; and add (2.7)(d) as follows:17
39-22-123.5. Earned income tax credit - legislative declaration18
- repeal.19
(2.7) (d) (I) FOR INCOME TAX YEARS COMMENCING ON OR AFTER20
JANUARY 1, 2028, A RESIDENT INDIVIDUAL IS ALLOWED AN EARNED21
INCOME TAX CREDIT AGAINST THE TAXES DUE UNDER THIS ARTICLE 2222
THAT IS EQUAL TO THE APPLICABLE PERCENTAGE , SET FORTH IN23
SUBSECTION (2.7)(d)(II) OF THIS SECTION, OF THE FEDERAL CREDIT THAT24
THE RESIDENT INDIVIDUAL WOULD HAVE BEEN ALLOWED UNDER SECTION25
32 (n)(2) OF THE INTERNAL REVENUE CODE, NOTWITHSTANDING THE DATE26
LIMITATION SET FORTH IN SECTION 32 (n) OF THE INTERNAL REVENUE27
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CODE AS SPECIFIED IN SECTION 9621 (a) OF THE "AMERICAN RESCUE PLAN1
ACT OF 2021", PUB.L. 117-2.2
(II) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (3.5) OF THIS3
SECTION, THE PERCENTAGE USED TO CALCULATE THE AMOUNT OF CREDIT4
THAT CAN BE CLAIMED PURSUANT TO SUBSECTION (2.7)(d)(I) OF THIS5
SECTION IS TWENTY-FIVE PERCENT.6
(3.5) (b) (I) For the income tax year commencing on January 1,7
2025, the percentage of the federal earned income tax credit that the8
resident individual claimed or could have claimed that is used to calculate9
the amount of earned income tax credit allowed pursuant to subsections10
(2)(d), (2.5)(e), and (2.7)(c), AND (2.7)(d) of this section is increased by11
fifteen percentage points if the estimated adjustment factor is equal to or12
greater than two percent.13
(c) For income tax years commencing on or after January 1, 2026,14
the percentage of the federal earned income tax credit that the resident15
individual claimed or could have claimed that is used to calculate the16
amount of earned income tax credit allowed pursuant to subsections17
(2)(d), (2.5)(e), and (2.7)(c), AND (2.7)(d) of this section is increased as18
follows if the estimated adjustment factor is as follows:19
SECTION 3. Act subject to petition - effective date. This act20
takes effect at 12:01 a.m. on the day following the expiration of the21
ninety-day period after final adjournment of the general assembly (August22
12, 2026, if adjour nment sine die is on May 13, 2026); except that, if a23
referendum petition is filed pursuant to section 1 (3) of article V of the24
state constitution against this act or an item, section, or part of this act25
within such period, then the act, item, section, or part will not take effect26
unless approved by the people at the general election to be held in27
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November 2026 and, in such case, will take effect on the date of the1
official declaration of the vote thereon by the governor.2
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