Senator Martinez Humenik, bill sponsor, presented House Bill 18-1208 and provided a handout to the committee [Attachment E]. Beginning in the current tax year 2018, this bill expands the state income tax credit for child care expenses. The credit is available to taxpayers who claim a child care expenses credit on their federal income tax return. Under current law, taxpayers with adjusted gross income (AGI) of $60,000 or less are eligible to claim the state credit. The credit is equal to:
- 50 percent of the federal credit for taxpayers with AGI of $25,000 or less;
- 30 percent of the federal credit for taxpayers with AGI of $25,001 to $35,000; and
- 10 percent of the federal credit for taxpayers with AGI of $35,001 to $60,000.
This bill allows taxpayers with AGI of up to $150,000 to claim the state credit. Under the bill, the state credit is equal to 80 percent of the federal credit for all eligible taxpayers. Credits are refundable for taxpayers with AGI of up to $60,000. For taxpayers with AGI between $60,001 and $150,000, credits are nonrefundable and, to the extent that they exceed a taxpayer's income tax liability, may be carried forward for up to five years.