Early Childhood Tax Credits
Help Children in Routt and Moffat County and Receive a Tax Credit in April
We appreciate your interest in helping Routt and Moffat County children. Since monetary contributions to United Way’s Early Childhood Education Fund qualify for the Colorado Child Care Contribution Tax Credit, you can decrease the after-tax cost of your gifts by more than 50 percent. You not only receive the state tax credit but also the state and federal contribution deduction.
The Colorado Child Care Contribution Credit (CCCCC) program, instituted in 1999, provides a 50 percent state tax credit for any contribution made to a qualifying organization. This incentive attracts donations to an industry that not only comprises a large sector of the economy on its own, but also provides a service that cuts down on absenteeism and stress for working parents, further buttressing Colorado’s economy. Whether or not you have children, you can receive this tax credit!
50% Childcare Contribution Credit
The tax credit is limited to donations up to $100,000 annually or Colorado income tax liability, whichever is less. Any unused credits may be carried forward for up to five years.
In-kind contributions, including stock, property, or any non-monetary donations are not eligible.
Credit Examples by Tax Bracket
This information should not be construed as tax advice. Tax benefits vary with individual circumstances.
Please consult with your tax advisor for specific details regarding your personal benefit. (based on current tax legislation IRS Prop. Reg. 2018-172 Aug. 23 2018 )
Example 1:
Calculated based on the 37% tax bracket
| Donation Amount | $1,000 | $5,000 | $10,000 | $25,000 |
|---|---|---|---|---|
| CO Child Care Credit (50%) | $(500) | $(2,500) | $(5,000) | $(12,500) |
| Federal Income Tax Deduction | $(185) | $(925) | $(1,850) | $(4,625) |
| State Income Tax Deduction | $(23) | $(116) | $(232) | $(579) |
| Reduced state tax deduction on federal return | $194 | $968 | $1,936 | $4,839 |
| Your out-of-pocket cost (estimated) | $485 | $2,427 | $4,854 | $12,135 |
| Percentage of Donation Saved in Taxes | 51.5% | 51.5% | 51.5% | 51.5% |
Example 2:
Calculated based on the 32% tax bracket
| Donation Amount | $1,000 | $5,000 | $10,000 | $25,000 |
|---|---|---|---|---|
| CO Child Care Credit (50%) | $(500) | $(2,500) | $(5,000) | $(12,500) |
| Federal Income Tax Deduction | $(160) | $(800) | $(1,600) | $(4,000) |
| State Income Tax Deduction | $(23) | $(116) | $(232) | $(579) |
| Reduced state tax deduction on federal return | $167 | $837 | $1,674 | $4,185 |
| Your out-of-pocket cost (estimated) | $484 | $2,421 | $4,843 | $12,106 |
| Percentage of Donation Saved in Taxes | 51.6% | 51.6% | 51.6% | 51.6% |
Example 3:
Calculated based on the 22% tax bracket
| Donation Amount | $1,000 | $5,000 | $10,000 | $25,000 |
|---|---|---|---|---|
| CO Child Care Credit (50%) | $(500) | $(2,500) | $(5,000) | $(12,500) |
| Federal Income Tax Deduction | $(110) | $(550) | $(1,100) | $(2,750) |
| State Income Tax Deduction | $(23) | $(116) | $(232) | $(579) |
| Reduced state tax deduction on federal return | $115 | $575 | $1,151 | $2,877 |
| Your out-of-pocket cost (estimated) | $482 | $2,410 | $4,819 | $12,049 |
| Percentage of Donation Saved in Taxes | 51.8% | 51.8% | 51.8% | 51.8% |
Example 4:
Calculated based on the 12% tax bracket
| Donation Amount | $1,000 | $5,000 | $10,000 | $25,000 |
|---|---|---|---|---|
| CO Child Care Credit (50%) | $(500) | $(2,500) | $(5,000) | $(12,500) |
| Federal Income Tax Deduction | $(60) | $(300) | $(600) | $(1,500) |
| State Income Tax Deduction | $(23) | $(116) | $(232) | $(579) |
| Reduced state tax deduction on federal return | $63 | $314 | $628 | $1,569 |
| Your out-of-pocket cost (estimated) | $480 | $2,398 | $4,796 | $11,991 |
| Percentage of Donation Saved in Taxes | 52% | 52% | 52% | 52% |