As with any tax credit or deductions, specific rules govern these credits and deductions. Below is a summary of these rules.
Maximum Credit - The amount of credit generated in any one tax year may not exceed $100,000.
Excess Credit - If the amount of the credit allowed exceeds the amount of the tax due for the tax year in which the credit is allowed, the excess credit shall not be refunded, but may be carried forward to the next tax year. Credits may be carried forward up to five years.
In-Kind Donations - A credit for in-kind contributions, such as stock and other non-monetary items, is not available.
Conflict of Interest - The contribution can not be made to a program in which the taxpayer or a person related to the taxpayer has a financial interest.
Availability in 2011 and Beyond - For tax years beginning on or after Jan. 1, 2011, but before Jan. 1, 2020 the credit will not be allowed unless the legislative council predicts within the revenue estimate prepared in the preceding December that general fund revenues will exceed the limit on appropriations. In the event that the credit is not allowed for the tax year in which the contribution is made because of the preceding limitation, the taxpayer making the contribution will be allowed to claim the credit in the next tax year for which a revenue surplus is predicted.
Credit Sunset - Claims for credits cannot be made after 2019 tax year unless the Colorado Legislature renews the law.
Eligible Programs - Child care organizations that are not licensed by the Department of Human Services must register with the Department of Revenue in order to receive contributions that qualify for the tax credit. Our programs have been qualified.
Documentation - Children, Youth & Family Services will provide a tax credit certification (DR 1317) to each donor. The DR1317 form must be provided by the donor with an income tax return filed on a paper form. In the case of an income tax return filed electronically, the certification must be provided to the Department of Revenue upon request.
Full details of the Child Care Contribution Tax Credit rules can be found at the Colorado Department of Revenue website. (www.colorado.gov/revenue - within the Tax Information Index find the Income Tax section and look under “C” for Child Care Contribution Tax Credit). We encourage you to consult your tax advisor as situations vary.
Last Updated on Thursday, 28 June 2012 07:09