State Income Tax Credit for Careworkers

The bill creates a refundable income tax credit (credit) that is available for income tax years commencing on or after January 1, 2024 2025 , but prior to January 1, 2029, for a qualifying resident individual (individual) working in the care workforce in the amount of $1,500. $1,200 for a single filer and $2,400 for two joint filers.

To be eligible for the credit, an individual must:

• Have an annual adjusted gross income of no more than $75,000 as a single filer or $150,000 $100,000 as a joint filer; and
• Be employed in the care workforce as a child care worker, home health-care worker, personal care aide, certified nursing assistant, or other qualifying personal care worker including a family member, friend, and neighbor who provides care; child care worker or a qualified direct care worker. and
• File a signed attestation stating that the taxpayer claiming the credit worked in a qualifying occupation in the state for at least 6 months of the tax year.

To further the administration of the credit, the bill:

• Requires the department of health care policy and financing, on or before September 30, 2025, and each September 30 thereafter, to provide the department of revenue an electronic report of the name and federal employer identification number of every long-term care employer that employs one or more direct care workers and provides services in Colorado during the calendar year;
• Requires the department of early childhood, on or before January 31, 2026, and each January 31 thereafter, to provide the department of revenue with an electronic report of child care workers eligible for the credit for the preceding calendar year; and
• Requires, on or before January 31, 2026, and each January 31 thereafter, every long-term care employer, excluding a consumer-directed care employer for which the department of health care policy and financing is required to file the return, that employed one or more direct care workers to make an information return to the executive director of the department of revenue for the preceding calendar year and requires the information return to be filed electronically. The bill imposes a penalty of $500 on long-term care employers who fail to file the return on or before January 31, unless reasonable cause is shown.

For the 2024-25 state fiscal year, $47.193 is appropriated from the general fund to the division of licensing and administration in the department of early childhood for the implementation of the bill.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)