(1) (a) The general assembly hereby finds and declares that:
The federal child tax credit, which includes the refundable portion of the credit commonly known as the additional child tax credit, supports low- and middle-income working families whose earnings are below an income threshold and who have children under seventeen years of age;
Since its establishment at the federal level in 1997, the credit has increased familyincome, reduced child poverty among families with children, and supported local economies; and
The credit has a positive impact on the early childhood development and health ofchildren whose families gain income from the credit.
(b) Now, therefore, it is the intent of the general assembly to establish a permanent and refundable state child tax credit for eligible Colorado taxpayers, which is equal to a percentage of the federal credit based on a family's adjusted gross income. The intended purpose of this credit is to support Colorado working families with young children, reduce child poverty, and to help Colorado's economy.
(2) As used in this section:
"Eligible child" means a qualifying child for purposes of the federal child tax creditwho is under six years of age at the end of the taxable year for which the credit is claimed.
"Federal child tax credit" means the child tax credit allowed under section 24 of theinternal revenue code, or any successor section, and includes the refundable portion of the tax credit, which portion is referred to as the additional child credit.
(3) (a) For an income tax year specified in subsection (4) of this section, a resident individual who claims a federal child tax credit for an eligible child on the individual's federal tax return is allowed a child tax credit against the income taxes due under this article for the same tax year.
(b) (I) For a resident individual who files a single return, the amount of the credit is equal to:
Thirty percent of the federal child tax credit that the resident individual claimed onhis or her federal tax return for each eligible child, if the individual's federal adjusted gross income is twenty-five thousand dollars or less;
Fifteen percent of the federal child tax credit that the resident individual claimed onhis or her federal tax return for each eligible child, if the individual's federal adjusted gross income is greater than twenty-five thousand dollars but less than or equal to fifty thousand dollars; and
Five percent of the federal child tax credit that the resident individual claimed on hisor her federal tax return for each eligible child, if the individual's federal adjusted gross income is greater than fifty thousand dollars but less than or equal to seventy-five thousand dollars.
(II) A resident individual who files a single return and whose federal adjusted gross income is greater than seventy-five thousand dollars is not allowed a credit under this section.
(c) (I) For two resident individuals who file a joint return, the amount of the credit is equal to:
Thirty percent of the federal child tax credit that the resident individuals claimed ontheir federal tax return for each eligible child, if the individuals' federal adjusted gross income is thirty-five thousand dollars or less;
Fifteen percent of the federal child tax credit that the resident individuals claimed ontheir federal tax return for each eligible child, if the individuals' federal adjusted gross income is greater than thirty-five thousand dollars but less than or equal to sixty thousand dollars; and
Five percent of the federal child tax credit that the resident individuals claimed ontheir federal tax return for each eligible child, if the individuals' federal adjusted gross income is greater than sixty thousand dollars but less than or equal to eighty-five thousand dollars.
(II) Two resident individuals who file a joint return and whose federal adjusted gross income is greater than eighty-five thousand dollars are not allowed a credit under this section.
No credit is allowed under this section until the United States congress has enactedthe "Marketplace Fairness Act of 2013", or any other act with substantially similar requirements, and the general assembly has enacted a law to implement the minimum simplification requirements in the congressional act. The credit allowed under this section may be claimed for any income tax year beginning with the income tax year during which the last prerequisite bill under this subsection (4) becomes law; except that, if the last bill becomes law after October 1 of a given year, the credit is first available in the next income tax year, and in no case may the credit be claimed prior to the 2014 income tax year.
The amount of the credit allowed under this section that exceeds the resident individual's income taxes due is refunded to the individual.
In the case of a part-year resident, the credit allowed under this section is apportionedin the ratio determined under section 39-22-110 (1).
The credit allowed under this section is not considered to be income or resources forthe purpose of determining eligibility for the payment of public assistance benefits and medical assistance benefits authorized under state law or for a payment made under any other publicly funded programs.
Source: L. 2013: Entire section added, (SB 13-001), ch. 381, p. 2229, § 4, effective August 7.
Cross references: In 2013, this section was added by the "Colorado Working Families Economic Opportunity Act of 2013". For the short title, see section 1 of chapter 381, Session Laws of Colorado 2013.