Legislation would make Colorado’s poorest families eligible for childcare tax credit


Deanna Jimenez (right), eating dinner with her daughter inside her Denver home, would qualify for a $1,000 rebate if lawmakers approve an expansion of the state’s childcare tax credit.

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DENVER -- Lawmakers finally heard a proposal, twice delayed at the Capitol, to provide a childcare tax credit to Colorado's poorest working families.

House Bill 1072, after several hours of debate before the House Finance Committee, was approved on a 7-5 party-line vote.

Deanna Jimenez, a single mother who plans to testify in support of the measure, is cautiously optimistic about the bill's passage, which would give her added financial security and peace of mind.

"I'm always trying to budget," said Jimenez. "Sometimes there's only $10 left over at the end of paying all those bills, paying daycare, to last me until my next paycheck. Sometimes I wonder how I'm going to pay for gas to get back and forth to work, get her to school."

Jimenez is among some 55,000 Colorado working families that earn less than $25,000 a year -- which actually disqualifies them for the state childcare tax credit that already exists.

In 1996, Colorado established that credit for families earning under $60,000 a year but tied it to the federal tax credit; to get money back from state income taxes, parents had to receive the federal tax credit.

And therein is the problem: to get the federal credit, a family has to pay in at least the amount they receive from the credit.

"Because these people don't have a federal tax liability, they don't wind up qualifying for this tax credit," said Rep. Brittany Petterson, D-Lakewood, who is sponsoring the legislation being heard Wednesday.

"We've identified about 50,000 households that will qualify for this tax credit."

The fiscal note attached to Petterson's bill estimates that it'll cost the state $3.4 million this fiscal year and will increase as more eligible Coloradans learn about the program and take advantage, pushing the estimated cost to the state up to $20.1 million in fiscal year 2016.

But supporters of the proposal believe the money brings a strong return on investment, better, in fact, than many other tax credits being proposed this legislative session, as lawmakers have a larger budget to play with due to an uptick in state revenues.

"It's effective, it's proven and it supports hundreds of thousands of Colorado families," said Ali Mickelson with the Colorado Fiscal Institute. "Colorado is the fifth least affordable state for child care, so this is a great way to help make ends meet."

The tax credit amounts to $500 per child, with a limit of $1,000 per household -- money that helps working parents remain in the workforce, according to Petterson.

"This bill is very important to help parents stay in the workforce and ensure their children are taken care of." Petterson said.

Jimenez said she'd use the extra money to do special things with her kids, like taking them to the zoo or a museum.

"Those are the kind of things I wish I could do right now," she said. "It'd be nice to be able to do those things, to make them smile more."

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