State Income Tax Credit for Careworkers

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

To be eligible for the credit, an individual must:

• Have an adjusted gross income of no more than $75,000 as a single filer or $100,000 as a joint filer; and
• Be employed in the care workforce as a child care worker or a qualified direct care worker.

To further the administration of the credit, the act:

• 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 act 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 act.

APPROVED by Governor May 31, 2024

EFFECTIVE August 7, 2024
(Note: This summary applies to this bill as enacted.)