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COLORADO CHILD CARE TAX CREDIT

Maximize Your Gift With the Colorado Childcare Tax Credit

Taxpayers who make a monetary contribution to promote childcare in Colorado may claim an income tax credit of 50% of the total donation. You do not need to have children in childcare to benefit from this contribution tax credit.

Both corporate and individual donors may benefit. Taxpayers who make a cash contribution to the YMCA of Northern Colorado’s Community Support Campaign may claim an income tax credit of 50% of the total donation on their Colorado income tax return. Please check with your accountant; you may need to itemize to take advantage of this tax benefit.

EXAMPLE

  • Donation Amount: $1,000
  • Federal Tax Savings at 32%: -$320
  • Colorado Tax Savings at 4.55%: -$46
  • Colorado Child Care Tax Credit: -$500
  • Total Donor Out of Pocket: $134

Colorado Childcare Tax Credit Guidelines

  • In-kind contributions of property (non-monetary donations) do not qualify for the credit.
  • Donors may not receive any goods or services in return for their contribution.
  • The credit 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.
  • The Y will provide you with the DR 1317 Child Care Contribution Credit Certification in January of the following year.
  • Donors should contact their tax advisors for advice about how the credit affects their tax picture. Information provided
    here is not tax advice.
  • Individuals who donate funds out of their RMDs (required minimum distributions) will receive credit without federal consequences.

Ways to Maximize Your Gift

  • A $300 charitable deduction is allowed for a single taxpayer who does not itemize their deductions. Married taxpayers are allowed a $600 deduction if they do not itemize their deductions.
  • For those who itemize their deductions, the adjusted gross income limitation is restored in 2021. This means individuals contributing cash directly to the YMCA of Northern Colorado can receive up to a 60% of their adjusted gross income (AGI) deduction against their income for 2021 with a five-year carry forward for amounts not deductible in 2021. 

Donors should contact their tax advisors for advice about how the credit affects their tax picture. Information provided here is not tax advice.