For the first time in 15 years, low- to moderate-income workers can claim a Colorado state EITC starting in 2016. Colorado’s state EITC will be worth 10 percent of the federal EITC, providing low-wage earners with an even larger refund at tax time.
What is Colorado EITC?
Colorado’s original state EITC enacted in 1999 was contingent upon the state having surplus revenue. It was last paid in 2001. Denver, Colorado implemented a temporary local EITC in 2002, funded by the city’s share of the Colorado federal TANF (Temporary Assistance for Needy Families) block grant. The Denver EITC was set at 20 percent of the federal credit, but the Denver EITC has been suspended indefinitely because of insufficient TANF funds.
2015 and 2016 Colorado Earned Income Tax Credit
The earned income credit is not available for tax years 2002 through 2014 because the State of Colorado did not have a sufficient budget surplus for the fiscal years ending June 30, 2002 through June 30, 2014. For an income tax YEARS COMMENCING ON OR AFTER JANUARY 1, 2015, 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 tax due 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. .]. If the earned income credit is larger than the tax liability calculated on the tax return, the difference will be refunded to the taxpayer.
2015 Colorado Earned Income Credit Chart
Depending on their income and number of children, single or married people who worked full-time or part-time at some point in 2015 can qualify for the Colorado EITC.
|Family Size||Family Income||Maximum Federal EITC||Maximum State EITC|
|Three or more children||$47,700 (single)$53,200 (married)||$6,200||$620|
|Two children||$44,400 (single)$49,900 (married)||$5,500||$550|
|One child||$39,100 (single)$44,600 (married)||$3,300||$330|
|No children||$14,800 (single)$20,300 (married)||$500||$50|
Part-time Colorado Residents claiming Colorado EIC in 2016
Part-year residents must multiply the Colorado credit by the percentage (not to exceed 100%) on line 34 of the Colorado 104PN schedule to determine the amount of credit they can claim based on their Colorado income. Nonresidents of Colorado are not eligible to claim the earned income credit. Example: Dan and Sylvia Daveys were part-year residents of Colorado in 2001. Their federal earned income credit was $1,644. The percentage from the 104PN schedule is 60.25%. The 2001 Colorado earned income credit is $99 ($1,644 X .1 = $164 x .6025 = $99).