House Bill 26-1004 Introduced

A Bill for an Act

• Page 1, Line 101Concerning a continuation of the income tax credit for a

• Page 1, Line 102qualifying contribution to promote child care in the

• Page 1, Line 103state.

Bill Summary

(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)

Under current law, for income tax years commencing prior to January 1, 2028, a taxpayer who makes a qualifying monetary contribution to promote child care in the state is allowed an income tax credit that is equal to 50% of the total value of the contribution, not to exceed $100,000. The bill extends this tax credit for 10 years.

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  Legislative declaration. (1)  The general assembly

• Page 2, Line 3finds and declares that:

• Page 2, Line 4(a)  A robust child care and education ecosystem is critical for

• Page 2, Line 5Colorado's economy and the health and well-being of Colorado's children;

• Page 2, Line 6(b)  The child care contribution tax credit has been an essential

• Page 2, Line 7source of funding for child care facilities throughout Colorado since

• Page 2, Line 81998, allowing individuals and corporations who make charitable

• Page 2, Line 9contributions to child care facilities to receive 50% of their donations

• Page 2, Line 10back in tax credits;

• Page 2, Line 11(c)  In 2022, the child care contribution tax credit benefitted

• Page 2, Line 12approximately 18,000 Coloradans, who received additional revenue on

• Page 2, Line 13their tax returns and generated $60 million for child care providers;

• Page 2, Line 14(d)  Throughout Colorado, child care providers use the child care

• Page 2, Line 15contribution tax credit to open new child care centers in child care

• Page 2, Line 16deserts, enroll families with low incomes who would otherwise be unable

• Page 2, Line 17to access care, and recruit and retain staff;

• Page 2, Line 18(e)  The child care contribution tax credit supports the Colorado

• Page 2, Line 19economy by empowering local businesses and supporting salaries for

• Page 2, Line 20child care providers; and

• Page 2, Line 21(f)  In the face of uncertain federal support and a challenging state

• Page 2, Line 22budget environment, renewing the child care contribution tax credit for

• Page 2, Line 2310 years is critical to support Colorado child care and after-school

• Page 2, Line 24providers, families, and local economies.

• Page 2, Line 25SECTION 2.  In Colorado Revised Statutes, 39-22-121, amend

• Page 2, Line 26(1.5), (6.8)(a), and (7); and repeal (6.8)(c) as follows:

• Page 3, Line 139-22-121.  Credit for child care facilities - legislative

• Page 3, Line 2declaration - definitions - repeal.

• Page 3, Line 3(1.5)  For income tax years commencing prior to January 1, 2028

• Page 3, Line 4January 1, 2038, any taxpayer who makes a monetary contribution to

• Page 3, Line 5promote child care in the state is allowed a credit against the income tax

• Page 3, Line 6imposed by this article 22 in an amount equal to fifty percent of the total

• Page 3, Line 7value of the contribution, except as otherwise provided in subsections (5)

• Page 3, Line 8and (6.7) of this section.

• Page 3, Line 9(6.8) (a)  In accordance with section 39-21-304 (1), which requires

• Page 3, Line 10each bill that extends a tax expenditure to include a amend the tax

• Page 3, Line 11preference performance statement as that is part of a the statutory

• Page 3, Line 12legislative declaration if one was not previously included in of the tax

• Page 3, Line 13expenditure, the general assembly finds and declares that the general

• Page 3, Line 14purpose of this tax expenditure is intended to induce certain designated

• Page 3, Line 15behavior by taxpayers Specifically, and that this tax expenditure is

• Page 3, Line 16specifically intended to encourage taxpayers to make donations that

• Page 3, Line 17promote child care in the state.

• Page 3, Line 18(c)  The department of revenue shall consult with the early

• Page 3, Line 19childhood leadership commission created in section 26.5-1-302, the

• Page 3, Line 20public-private collaboration unit in the department of personnel created

• Page 3, Line 21in section 24-94-103 (2), and the department of early childhood created

• Page 3, Line 22in section 26.5-1-104 (1) to study possible improvement to the tax credit

• Page 3, Line 23allowed pursuant to this section and to develop recommendations for

• Page 3, Line 24further measuring the effectiveness of the tax credit. On or before July 31,

• Page 3, Line 252024, the department of revenue shall deliver to the joint budget

• Page 3, Line 26committee, the finance committees of the senate and the house of

• Page 3, Line 27representatives, and the office of the state auditor the recommendations

• Page 4, Line 1developed pursuant to this subsection (6.8)(c). In addition to

• Page 4, Line 2recommendations for further measuring the effectiveness of the tax credit,

• Page 4, Line 3the recommendations must include recommendations for:

• Page 4, Line 4(I)  Improving the structure, oversight, and administration of the

• Page 4, Line 5tax credit;

• Page 4, Line 6(II)  Developing mechanisms to inform taxpayers and eligible child

• Page 4, Line 7care facilities and programs about the availability of the tax credit;

• Page 4, Line 8(III)  Ensuring the tax credit is equitably promoting child care in

• Page 4, Line 9all communities; and

• Page 4, Line 10(IV)  Allowing donations of in-kind real property to qualify as an

• Page 4, Line 11eligible contribution to promote child care.

• Page 4, Line 12(7)  This section is repealed, effective January 1, 2035 January

• Page 4, Line 131, 2045.

• Page 4, Line 14SECTION 3.  Act subject to petition - effective date. This act

• Page 4, Line 15takes effect at 12:01 a.m. on the day following the expiration of the

• Page 4, Line 16ninety-day period after final adjournment of the general assembly (August

• Page 4, Line 1712, 2026, if adjournment sine die is on May 13, 2026); except that, if a

• Page 4, Line 18referendum petition is filed pursuant to section 1 (3) of article V of the

• Page 4, Line 19state constitution against this act or an item, section, or part of this act

• Page 4, Line 20within such period, then the act, item, section, or part will not take effect

• Page 4, Line 21unless approved by the people at the general election to be held in

• Page 4, Line 22November 2026 and, in such case, will take effect on the date of the

• Page 4, Line 23official declaration of the vote thereon by the governor.