Colorado Child Care Contribution Tax Credit

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EPIC’s members are committed to a future where supporting families and children first provide pathways to business success and economic growth. Our members enjoy collaborating with other influential leaders in the community to build these pathways. As advocates for family-friendly workplaces and policies around quality child care and education, we value time gathering with other community leaders to spread the message.

We welcome members and guests at a variety of events throughout the year, many of them virtual. Please bookmark this page to stay informed about upcoming events, and subscribe to our e-newsletter or visit our social media channels, including LinkedIn, Facebook, and Twitter.

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COLORADO TAX CREDIT

The Colorado Child Care Contribution Tax Credit enables qualified child care providers and intermediary organizations to receive financial donations directly from individuals and businesses. These funds can be used by the child care program in a number of ways, including:

Purchase enrichment materials
Send staff to professional development
Establish or operate a child care facility
Grant or loan programs for parents
Training programs for child care providers
Information dissemination programs that assist parents with child care information and referral services

Colorado leads the nation in providing a tax-advantaged tool for child care through the Child Care Contribution Tax Credit (CCTC). This unique public / private partnership allows individuals and businesses to claim a 50% state income tax credit for qualified contributions to child care providers (up to $100,000). You can find a licensed child care provider to donate to here.

CCTC contributions are used to establish and operate licensed child care facilities, fund grant programs (scholarships) for parents who need help paying for care and supplement professional development costs for individuals working in the child care sector.

When receiving donations, child care facilities must complete Colorado Department of Revenue Form DR 1317 and provide it to the donor for submission with their Colorado Income Tax Return.

Organizations providing similar services to a licensed child care provider may be considered a qualified intermediary and must complete Colorado Department of Revenue Form DR 1318 to register to become a qualified organization for purposes of the CCTC. These organizations include:

Child care services similar to those provided by a licensed child care facility
A grant or loan program for parents in Colorado requiring financial assistance for child care
Training of child care providers in Colorado
An information dissemination program in Colorado to provide information and referral services to assist parents in obtaining child care

Organizations and facilities that received qualifying contributions prior to January 1, 2004 may qualify for exception from
certain rules applicable to the credit. If this applies, please use the Child Care Contribution Tax Credit Grandfathered Organization Application DR 1319.

Questions about CCTC? Download our FAQs.

EMPLOYER TOOLKIT

Child care has three distinct roles in Colorado’s economy:

It provides early care and education for 335,000 children under age 5, preparing them for future success in school and work.
Child care is an essential workforce support for parents and their employers.
Nearly 5,000 licensed child care businesses generate millions in annual revenues, create thousands of jobs and support higher output multipliers for other economic sectors.

Why Are Employers Interested in Early Care and Education?

Access and affordability for early care and education affect an employee’s ability to work. When employees are worrying about child care, productivity is impacted and employees miss work to stay home with sick children, or decide to quit work because of child care problems.
Financial implications for your business are real. “Bottom lines” suffer as productivity declines and employee turnover costs compound.
Employers are devising creative ways to invest in their employees. Businesses are creating policies and benefits attractive to employees and those being recruited. With more than two-thirds of young children in Colorado living in households where all adults are in the workforce, attention to child care has risen to a new level.
Federal and state tax deductions and credits make business investment in child care more affordable while the costs for families hit new heights and approach the level of college tuition. To support working parents, federal Dependent Care Flexible Spending Arrangements are offered by nearly 9 out of 10 large companies. IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits, provides information for Dependent Care Assistance Page 9 through an FSA. Colorado’s Child Care Contribution Tax Credit is a 50% state income tax credit for contributions to child care facilities as community investment.

Employers can ease the burden of child care on their employees, creating more productivity in the workplace by:

Increasing Access to Quality Child Care
Supporting Affordable Child Care
Developing Family-Friendly Policies and Procedures
Informing Employees of Federal Tax Supports

Learn more about how your company and your employees can benefit from providing better child care solutions by downloading EPIC’s Employer Toolkit, designed to draw connections between early childhood and workplace productivity.