HOUSE BILL 23-1112
BY REPRESENTATIVE(S) Bird and Young, Amabile, Bacon,
Boesenecker, Brown, deGruy Kennedy, Dickson, Duran, English, Froelich,
Garcia, Gonzales-Gutierrez, Hamrick, Herod, Jodeh, Joseph, Kipp, Lindsay,
Lindstedt, Lukens, Martinez, McCormick, McLachlan, Michaelson Jenet,
Ricks, Sirota, Snyder, Titone, Vigil, Weissman, Willford, Lieder, Sharbini,
Story, Valdez, McCluskie;
also SENATOR(S) Hansen and Kolker, Bridges, Buckner, Cutter,
Danielson, Exum, Ginal, Gonzales, Hinrichsen, Jaquez Lewis, Marchman,
Moreno, Mullica, Priola, Roberts, Rodriguez, Sullivan, Winter F.,
Zenzinger, Fenberg.
C
ONCERNING THE ENLARGEMENT OF CERTAIN INCOME TAX CREDITS FOR
LOW
- AND MIDDLE-INCOME WORKING INDIVIDUALS OR FAMILIES ,
AND, IN CONNECTION THEREWITH , REDUCING STATE INCOME TAX
REVENUE BY INCREASING THE EARNED INCOME TAX CREDIT AND
RESTRUCTURING THE CHILD TAX CREDIT TO ALLOW ALL LOW
-INCOME
TAXPAYERS WITH INCOME BELOW CERTAIN THRESHOLDS TO CLAIM
THE CREDIT
.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, 39-22-123.5, amend
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. (2)(a), (2)(c)(I), (2.5)(a), (2.5)(d)(I), and (2.7)(b)(I); and add (2)(d),
(2.5)(e), and (2.7)(c) as follows:
39-22-123.5. Earned income tax credit - not a refund of excess
state revenues - trigger - legislative declaration - repeal. (2) (a) (I) For
an income tax year commencing prior to January 1, 2022, a resident
individual who claims an earned income tax credit on the individual's
federal tax return is allowed an earned income tax credit against the taxes
due under this article 22 that is equal to ten percent of the federal credit that
the resident individual claimed on his or her federal tax return for the same
tax year.
(II) T
HIS SUBSECTION (2)(a) IS REPEALED, EFFECTIVE DECEMBER 31,
2032.
(c) (I) For income tax years commencing on or after January 1,
2023, but before January 1, 2026
2024, AND FOR THE INCOME TAX YEAR
COMMENCING ON
JANUARY 1, 2025, a resident individual who claims an
earned income tax credit on the individual's federal tax return is allowed an
earned income tax credit against the taxes due under this article 22 that is
equal to twenty-five percent of the federal credit that the resident individual
claimed on his or her federal tax return for the same tax year.
(d) (I) F
OR THE INCOME TAX YEAR COMMENCING ON JANUARY 1,
2024,
A RESIDENT INDIVIDUAL WHO CLAIMS AN EARNED INCOME TAX CREDIT
ON THE INDIVIDUAL
'S FEDERAL TAX RETURN IS ALLOWED AN EARNED INCOME
TAX CREDIT AGAINST THE TAXES DUE UNDER THIS ARTICLE
22 THAT IS EQUAL
TO THIRTY
-EIGHT PERCENT OF THE FEDERAL CREDIT THAT THE RESIDENT
INDIVIDUAL CLAIMED ON HIS OR HER FEDERAL TAX RETURN FOR THE SAME
TAX YEAR
.
(II) T
HIS SUBSECTION (2)(d) IS REPEALED, EFFECTIVE DECEMBER 31,
2034.
(2.5) (a) (I) For income tax years commencing on or after January
1, 2020, but before January 1, 2022, a resident individual is allowed an
earned income tax credit against the taxes due under this article 22 that is
equal to ten percent of the federal credit that the resident individual would
have been allowed, but for the fact that the resident individual, the resident
individual's spouse, or one or more of the resident individual's dependents
PAGE 2-HOUSE BILL 23-1112 do not have a social security number that is valid for employment.
(II) T
HIS SUBSECTION (2.5)(a) IS REPEALED, EFFECTIVE DECEMBER
31, 2032.
(d) (I) For income tax years commencing on or after January 1,
2023, but before January 1, 2026
2024, AND FOR THE INCOME TAX YEAR
COMMENCING ON
JANUARY 1, 2025, a resident individual is allowed an
earned income tax credit against the taxes due under this article 22 that is
equal to twenty-five percent of the federal credit that the resident individual
would have been allowed, but for the fact that the resident individual, the
resident individual's spouse, or one or more of the resident individual's
dependents do not have a social security number that is valid for
employment.
(e) (I) F
OR THE INCOME TAX YEAR COMMENCING ON JANUARY 1,
2024,
A RESIDENT INDIVIDUAL IS ALLOWED AN EARNED INCOME TAX CREDIT
AGAINST THE TAXES DUE UNDER THIS ARTICLE
22 THAT IS EQUAL TO
THIRTY
-EIGHT PERCENT OF THE FEDERAL CREDIT THAT THE RESIDENT
INDIVIDUAL WOULD HAVE BEEN ALLOWED
, BUT FOR THE FACT THAT THE
RESIDENT INDIVIDUAL
, THE RESIDENT INDIVIDUAL'S SPOUSE, OR ONE OR
MORE OF THE RESIDENT INDIVIDUAL
'S DEPENDENTS DO NOT HAVE A SOCIAL
SECURITY NUMBER THAT IS VALID FOR EMPLOYMENT
.
(II) T
HIS SUBSECTION (2.5)(e) IS REPEALED, EFFECTIVE DECEMBER
31, 2034.
(2.7) (b) (I) For income tax years commencing on or after January
1, 2023, but before January 1, 2026
2024, AND FOR THE INCOME TAX YEAR
COMMENCING ON
JANUARY 1, 2025, a resident individual is allowed an
earned income tax credit against the taxes due under this article 22 that is
equal to twenty-five percent of the federal credit that the resident individual
would have been allowed under section 32 (n)(1) of the internal revenue
code, notwithstanding the date limitation set forth in section 32 (n) of the
internal revenue code as specified in section 9621 (a) of the "American
Rescue Plan Act of 2021", Pub.L. 117-2.
(c) (I) F
OR THE INCOME TAX YEAR COMMENCING ON JANUARY 1,
2024,
A RESIDENT INDIVIDUAL IS ALLOWED AN EARNED INCOME TAX CREDIT
PAGE 3-HOUSE BILL 23-1112 AGAINST THE TAXES DUE UNDER THIS ARTICLE 22 THAT IS EQUAL TO
THIRTY
-EIGHT PERCENT OF THE FEDERAL CREDIT THAT THE RESIDENT
INDIVIDUAL WOULD HAVE BEEN ALLOWED UNDER SECTION
32 (n)(1) OF THE
INTERNAL REVENUE CODE
, NOTWITHSTANDING THE DATE LIMITATION SET
FORTH IN SECTION
32 (n) OF THE INTERNAL REVENUE CODE AS SPECIFIED IN
SECTION
9621 (a) OF THE "AMERICAN RESCUE PLAN ACT OF 2021", PUB.L.
117-2.
(II) T
HIS SUBSECTION (2.7)(c) IS REPEALED, EFFECTIVE DECEMBER
31, 2034.
SECTION 2. In Colorado Revised Statutes, 39-22-129, amend
(1)(b), (2)(a), (3)(a), (3.5)(a), and (4) introductory portion; and add (4.5),
(8), and (9) as follows:
39-22-129. Child tax credit - legislative declaration - definitions
- repeal. (1) (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:
(a) (I) "Eligible child" means
FOR INCOME TAX YEARS COMMENCING
BEFORE
JANUARY 1, 2024, a qualifying child for purposes of the federal
child tax credit who is under six years of age at the end of the taxable year
for which the credit is claimed.
(II) "E
LIGIBLE CHILD" MEANS FOR INCOME TAX YEARS COMMENCING
ON OR AFTER
JANUARY 1, 2024, A QUALIFYING CHILD, AS DEFINED IN
SECTION
152 (c) OF THE INTERNAL REVENUE CODE, WHO IS UNDER SIX YEARS
OF AGE AT THE END OF THE TAXABLE YEAR FOR WHICH THE CREDIT IS
CLAIMED
.
(3) (a) Except as provided in subsection (4) of this section, for
income tax years commencing on or after January 1, 2022,
BUT BEFORE
JANUARY 1, 2024, 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
PAGE 4-HOUSE BILL 23-1112 tax credit in the amount set forth in subsection (3)(b) or (3)(c) of this
section against the income taxes due under this article 22 for the same tax
year.
(3.5) (a) Except as provided in subsection (4) of this section, for
income tax years commencing on or after January 1, 2022,
BUT BEFORE
JANUARY 1, 2024, a resident individual who could have claimed a federal
child tax credit for an eligible child on the individual's federal tax return had
section 24 (h)(7) of the internal revenue code not applied to the definition
of qualifying child, is allowed a child tax credit in the amount set forth in
subsection (3.5)(b) or (3.5)(c) of this section against the income taxes due
under this article 22 for the same tax year.
(4) In any income tax year commencing on or after January 1, 2022,
BUT BEFORE JANUARY 1, 2024, if the changes specified in section 9611 of
the "American Rescue Plan Act of 2021", Pub.L. 117-2, are no longer
applicable to the federal child tax credit allowed in section 24 of the internal
revenue code, then the amount of the child tax credit allowed in this section
is as follows:
(4.5) (a) (I) F
OR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY
1, 2024, A RESIDENT INDIVIDUAL WHO FILES A SINGLE RETURN IS ALLOWED
A CHILD TAX CREDIT AGAINST THE INCOME TAXES DUE UNDER THIS ARTICLE
22 FOR EACH ELIGIBLE CHILD OF THE TAXPAYER IN THE FOLLOWING
AMOUNTS
:
(A) O
NE THOUSAND TWO HUNDRED DOLLARS IF THE INDIVIDUAL 'S
FEDERAL ADJUSTED GROSS INCOME IS TWENTY
-FIVE THOUSAND DOLLARS OR
LESS
;
(B) S
IX HUNDRED DOLLARS 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
(C) TWO HUNDRED DOLLARS IF THE INDIVI DUAL 'S FEDERAL
ADJUSTED GROSS INCOME IS GREATER THAN FIFTY THOUSAND DOLLARS BUT
LESS THAN OR EQUAL TO SEVENTY
-FIVE THOUSAND DOLLARS.
(II) F
OR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY
1, 2024, TWO RESIDENT INDIVIDUALS WHO FILE A JOINT RETURN ARE
PAGE 5-HOUSE BILL 23-1112 ALLOWED A CHILD TAX CREDIT AGAINST THE INCOME TAXES DUE UNDER THIS
ARTICLE
22 FOR EACH ELIGIBLE CHILD OF THE TAXPAYER IN THE FOLLOWING
AMOUNTS
:
(A) O
NE THOUSAND TWO HUNDRED DOLLARS IF THE INDIVIDUALS '
FEDERAL ADJUSTED GROSS INCOME IS THIRTY -FIVE THOUSAND DOLLARS OR
LESS
;
(B) S
IX HUNDRED DOLLARS IF THE INDIVIDUALS' FEDERAL ADJUSTED
GROSS INCOME IS GREATER THAN THIRTY
-FIVE THOUSAND DOLLARS BUT LESS
THAN OR EQUAL TO SIXTY THOUSAND DOLLARS
; AND
(C) TWO HUNDRED DOLLARS IF THE INDIVIDUALS ' FEDERAL
ADJUSTED GROSS INCOME IS GREATER THAN SIXTY THOUSAND DOLLARS BUT
LESS THAN OR EQUAL TO EIGHTY
-FIVE THOUSAND DOLLARS.
(b) (I) 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
.
(II) T
WO 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
.
(8) (a) F
OR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY
1, 2025, THE DEPARTMENT OF REVENUE SHALL ADJUST THE FEDERAL
ADJUSTED GROSS INCOME AMOUNTS SET FORTH IN THIS SECTION TO REFLECT
INFLATION FOR EACH INCOME TAX YEAR IN WHICH THE CREDIT DESCRIBED IN
THIS SECTION IS ALLOWED IF CUMULATIVE INFLATION SINCE THE LAST
ADJUSTMENT
, WHEN APPLIED TO THE CURRENT LIMITS , RESULTS IN AN
INCREASE OF AT LEAST ONE THOUSAND DOLLARS WHEN THE ADJUSTED
LIMITS ARE ROUNDED TO THE NEAREST ONE THOUSAND DOLLARS
.
(b) A
S USED IN THIS SUBSECTION (8), "INFLATION" MEANS THE
ANNUAL PERCENTAGE CHANGE IN THE
UNITED STATES DEPARTMENT OF
LABOR BUREAU OF LABOR STATISTICS CONSUMER PRICE INDEX FOR
DENVER-AURORA-LAKEWOOD FOR ALL ITEMS PAID BY ALL URBAN
CONSUMERS
, OR ITS APPLICABLE SUCCESSOR INDEX.
(9) S
UBSECTIONS (3), (3.5), AND (4) OF THIS SECTION AND THIS
PAGE 6-HOUSE BILL 23-1112 SUBSECTION (9) ARE REPEALED, EFFECTIVE DECEMBER 31, 2026.
SECTION 3. Act subject to petition - effective date. This act
takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly; except
that, if a referendum petition is filed pursuant to section 1 (3) of article V
of the state constitution against this act or an item, section, or part of this act
within such period, then the act, item, section, or part will not take effect
unless approved by the people at the general election to be held in
PAGE 7-HOUSE BILL 23-1112 November 2024 and, in such case, will take effect on the date of the official
declaration of the vote thereon by the governor.
____________________________ ____________________________
Julie McCluskie Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 8-HOUSE BILL 23-1112