colorado child care contribution credit
The Adoption Exchange has been approved by the State of Colorado to offer the Colorado Child Care Tax Credit. If you are a Colorado taxpayer, you are eligible to receive a 50% state tax credit on your cash donation of $250 or more to The Adoption Exchange. This is in addition to your federal income tax deduction. In-kind gifts and gifts of appreciated securities do not qualify for this credit. EXAMPLE: Tax Savings or $100,000 Donation
(Illustration uses 30% tax bracket)
Child Care Contribution Tax Credit
|
Donation of $100,000
|
$100,000 |
|
Colorado Income Tax Credit
*Federal and State Income Tax Deduction
|
$ 50.000
$ 18,200 |
Total Tax Savings
After-Tax 'Cost" of Giving $100,000 |
$ 68,200
$ 31,800 |
*Federal Tax deduction is lowered because of the add-back effect of reduced state tax.Child Care Contribution Tax Credit FAQ’sWhat is the Child Care Contribution Credit?Any taxpayer who makes a monetary contribution to promote child care in Colorado may claim an income tax credit of 50% of the total contribution.
Do corporations qualify for the credit?
Any Colorado state taxpayer qualifies for the credit. This includes businesses.
Do in-kind donations qualify for the credit? What about stock donations?
The credit is available for unrestricted monetary contributions only. Donations of property—including gifts of stock—do not qualify for the credit.
What kind of documentation do I need?
The Adoption Exchange will provide a DR 1317 form to the donor along with a donation receipt. Donors must provide this statement to the Department of Revenue upon request. Click here to request a DR 1317 form.
Is there a minimum or maximum contribution amount?
The minimum qualifying gift is $250. The maximum gift is $200,000. Also, the credit cannot exceed the tax liability for the year. Any excess credits may be carried forward for up to five years.
For how many years is the credit valid?
This credit is valid through December 31, 2009. HB08-1049 extends this credit for an additional 10 years, through December 31, 2019, however the credit is restricted to years in which the growth of the State General Fund is six percent or greater. The Department of Revenue will specify on its website on or before January 1 whether the credit will be allowed for each upcoming tax year. If the taxpayer is ineligible one year, the credit can be claimed in the next income tax year.
How does the credit help The Adoption Exchange in Colorado?
The Adoption Exchange relies on the generosity of individuals, corporations and foundations to meet all or our operating needs. The child care contribution credit is a benefit for our supporters.
Note: This information is for illustration purposes only and should not be considered tax advice. Please consult your professional legal or financial advisor for more specific information regarding the tax advantages of making a gift.
Visit Colorado Department of Revenue / Child Contribution Credit to learn more.
Contact Matt Rivera, Controller/CFO, by email or phone at 303-755-4756, ext. 232 for more information.
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