Child Care Contribution Credit[NOTE]

Taxpayer that make a monetary contribution to promote child care in Colorado may claim an income tax credit of 50% of the total contribution. In-kind contributions (non-monetary donations) are not eligible for this credit.

Eligible Purposes

Contributions to promote child care in Colorado qualify for this credit. Child care means care provided to a child twelve years of age or younger. Donating money for the establishment or operation of a child care facility or program in Colorado. This is limited to:

A licensed child care center
A licensed child placement agency
A licensed family child care home
A licensed foster care home
A licensed homeless youth shelter
A licensed residential child care facility
A licensed secure residential treatment center
A registered child care program that provides services similar to a licensed child care center.

Donating money, real estate or property for the establishment or operation of a child care facility or program in Colorado. Donating money for a registered grant or loan program for parents in Colorado requiring financial assistance for child care. Donating money for a registered training program for child care providers in Colorado. Donating money for a registered information dissemination program that assists parents with child care information and referral services.Donating money for a registered grand-fathered child care organization. (Grand-fathered organizations may also accept qualified donations for the care of children ages 13-18.)

Contributions will not qualify for this credit if any of the following apply:

The contribution is made to a child care facility in which the taxpayer or a person related to the taxpayer has a financial interest.
The contribution is made to a for-profit business (unless the contribution is directly used for the acquisition or improvement of facilities, equipment, or services, including the improvement of staff salaries, staff training, or the quality of child care)
The contribution is not directly related to promoting child care in Colorado.
The contribution is not directly related to promoting child care in Colorado.
The contribution is made after December 31, 2005.
The donor receives consideration from the donee organization in exchange for the contribution. If this is the case, there is a sale rather than a contribution. However, this will not restrict a company from contributing to a child care center and claiming a credit based on that donation if the employees of the company receive a benefit in the form of discounted child care. One of the prime goals of this tax credit is to encourage employers to contribute to child care for their employees, assuming that the employer has no financial interest in the child care facility.
The credit allowed shall not exceed $100,000 per year. The credit allowed shall not exceed the tax liability for the year. Any excess credits may be carried forward for up to five years.

Back