Colorado Child Care Contribution Tax Credit

Playworks Colorado encourages donors to increase their gift and benefit from a 50% Colorado Tax Credit. The credit is available to Colorado residents who make monetary contributions to Playworks Colorado.

The Colorado Child Care Contribution Tax Credit was established to encourage greater private support of Colorado child care program. Because monetary contributions to Playworks Colorado qualify for this tax credit, you may be able to decrease the after-tax cost of your gifts by more than 50%.

The effect of the credit is that half of your donation to Playworks Colorado is offset by a reduction of your Colorado income taxes. You will still be able to claim your full contribution as a charitable deduction on your Federal and State income tax returns if you itemize deductions. Examples of the total impact on your taxes are shown in the chart below. As always, you should consult with your tax advisor to determine how the credit will affect you personally.

Tax Saving Examples

(Illustration only; please consult with your tax advisor.)

Federal Income Tax Bracket

28%

33%

35%

Contribution

$1,000

$1,000

$1,000

Colorado Child Care Credit

($500)

($500)

($500)

Charitable Deduction Colorado Tax Saving

($46.30)

($46.30)

($46.30)

Charitable Deduction Federal Tax Saving

($280)

($330)

($350)

Related Federal Tax Effect*

$152.96

$180.28

$191.21

After Tax Costs of Gift to Playworks Colorado

$326.66

$303.98

$294.91

Total Tax Saving

$673.34

$696.02

$705.10

Cost per dollar to contribute

32.7 cents

30.3 cents

29.4 cents

*Lower State income taxes mean lower State tax deductions for Federal tax purposes.

Guidelines:

  • The maximum credit you may take in any one year is $100,000 or your actual Colorado income tax liability for the year, whichever is less.
  • Any unused credit may be carried forward for up to five additional tax years.
    Only monetary donations are eligible. Stock or other securities and in-kind gifts, such as labor or equipment, are not eligible but may qualify for other tax benefits.
  • In the case of donations associated with events, only the deductible portion of your payment, reduced by the value of goods and services received, is eligible.
  • Both individuals and corporations can take advantage of the credit.

Playworks will provide a signed letter that states the amount of the cash gift, along with the DR1317 tax form certifying the child care contribution.

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