COLORADO — The new Colorado Family Affordability Tax Credit (FATC) is meant to help families by offering a refundable credit for parents with children under 16.
WATCH: New state tax credit available for families with children under 16
Parents can receive up to $3200 for kids under six and up to $2,400 for each child between six and 16 years old. You don't need to earn income to get a FATC, but a tax return must be filed. Single filers could not make more than $85,000 in 2024 and joint filers can make up to $95,000 to be eligible for the credit. Learn more about the eligibility requirements here.
The act was signed into law in May 2024 and it went into effect in August. It will appropriate $178,491 from the general fund to the Department of Revenue for its implementation.
Along with the FATC, Colorado also offers parents a child tax credit. Coloradans do not have to earn income to get the tax credit, but they do have to file a state tax return.
The tax credit is available for families with a child under six years old as of December 31, 2024. Those eligible make up to $75,000 a year if they file taxes individually, or up to $85,000 if filing jointly or married. Parents can get between $200 and $1,200 through the credit. Families of lower income may see higher credits.
There are four other state tax credits available including for early childhood educators, low-income Coloradans, those who are disabled or seniors, and there is the Taxpayer's Bill of Rights, which is a credit available to everyone over 18 living in the state. Learn more about the details of each of these credits on the Colorado Department of Public Health and Environment's website.
Your Tax Lady's founder Kathy Bylkas says if your child is older than five, the return you get from Colorado's new family tax credit decreases fast.
"If they're younger, under five, it's a nice deduction," said Bylkas. "Over five, they're not going to get anything."
Bylkas said filers lose out on $1,200 for this credit once their child ages out. Filers also lose out on more money the more their income goes up.
"Here is the credit now that their income is up 20 grand," said Bylkas. "This credit drops down to $600 from $1,200 because it's still a kid at (an) age under five. Now, the parents get $1,800 and you have that difference."
Bylkas said it's important to file early because it helps reduce the risk of identity theft, and she said whichever parent files first in a separated couple receives the head of household tax credits.
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One dead following a stabbing at home along East Boulder Street in Colorado Springs
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