Care Worker Tax Credit

1. Now: Update or create a Professional Development Information System (PDIS) account.

• PDIS is a one-stop online resource for the early childhood workforce. The PDIS is available in English and Spanish and offers a broad range of eLearning courses on child development, health, and safety. You must create a PDIS account to receive the credit .
• If you do not already have an account, visit the PDIS to create an account and complete your profile.
• If you have an account already, make sure your PDIS profile is up to date, including first and last name and employment (if applicable). Including a Social Security Number or Individual Taxpayer Identification Number (ITIN) will help the Colorado Department of Revenue confirm eligibility for the tax credit. Personally identifiable information is secure and not shared with immigration enforcement agencies.
• The PDIS Help Desk has a how-to guide for Creating Your PDIS Account and can be reached at cdec_pdishelp@state.co.us or 1-844-447-4441 Option 2.

2. January 2025: Start Tracking Your Hours Caring for Children in 2025.

• For employees at a licensed child care program: Make sure your employment is active and verified in the PDIS (how-to guide).
• For operators of a family child care home: Link your Family Child Care license to your PDIS profile (how-to guide).
• For family, friend, and neighbor (FFN) child care workers: If you take care of children who are not your own and are five years of age or younger, track how many hours you spend taking care of them. You can use attendance sheets, the CDEC template, or your own system to keep track of the hours and ages of the children you take care of. This documentation will not be uploaded to the PDIS, but you will need to retain it for three years in case you are asked to show it for tax purposes.

3. Fall/Winter 2025: Log in to the PDIS and Complete the Care Worker Tax Credit Attestation.

• Between October 1 and December 31, 2025, login to PDIS and complete an attestation to confirm that you have provided child care for at least 720 hours in the tax year.

4. Spring 2026: File Your Colorado State Income Taxes.

• To receive the tax credit, you must file a Colorado Individual Income Tax Return by the due date, even if you do not owe any taxes. After the credit is applied to reduce your income tax liability, any excess credit will be refunded to you. Information about how to claim the Care Worker Tax Credit will be available at a later date from the Colorado Department of Revenue. Free online tax filing services and free in-person tax help are available from Get Ahead Colorado/Hacia Adelante Colorado.

Who is eligible for the Care Worker Tax Credit?

Child care workers and early childhood professionals must:

• Be registered in the Colorado Shines Professional Development Information System (PDIS). 
• Have provided child care for at least 720 hours during the tax year to children who are five years of age or younger as one of the following:
  • An employee or operator of a licensed child care center, preschool or family child care home with a Colorado Shines rating Level 1-5; or
  • An informal family, friend, or neighbor (FFN) child care worker who provides care in their home for children other than their own.
• Have an adjusted gross income less than or equal to $75,000 as a single filer or $100,000 as a joint filer (if you are married and file taxes together). Adjusted gross income is your total annual income minus certain adjustments like contributions to retirement or student loan interest.

Preschool teachers, early educators, assistant teachers, family child care home assistants, pre-k paraprofessionals, substitutes, CCCAP Qualified Exempt providers, Family, Friend, and Neighbor (FFN) providers, and other job roles can all qualify for the Care Worker Tax Credit as long as they are registered in PDIS, provide care for 720 hours in the tax year to children age five and under other than their own, and meet the income requirements.

Qualifying direct care workers (in the health care sector) are also eligible for the Care Worker Tax Credit. Please review the statute for more details on eligibility for direct care workers and refer any questions to the Colorado Department of Revenue.

When does the Care Worker Tax Credit start?

The Care Worker Tax Credit starts in the 2025 tax year. If you provide 720 hours of child care in 2025 and meet the eligibility requirements, you will receive your refund after filing your Colorado Individual Income Tax Return in spring 2026. The Care Worker Tax Credit will be available through the 2028 tax year (which you would file a tax return for in spring 2029).

What is a refundable income tax credit?

If a taxpayer's tax bill is less than the amount of a refundable credit, they can get the difference back in their refund. For example, if an eligible taxpayer owes $1,000 in taxes and they qualify for this $1,200 refundable credit, they will receive a $200 refund. Taxpayers who don’t owe any taxes and aren't required to file must file a return to claim refundable tax credits.

How many months of the year do I need to provide care? 

It depends on how many hours per week you provide care. 

720 hours is the equivalent of:

• 14.5 weeks at 50 hours per week 
• 18 weeks at 40 hours per week 
• 24 weeks at 30 hours per week 
• 36 weeks at 20 hours per week
• 48 weeks at 15 hours per week
   

How do I track my hours of child care?

• For employees at a licensed child care program: Make sure your employment is active and verified in the PDIS (how-to guide). 
• For operators of licensed Family Child Care Homes: Link your Family Child Care license to your PDIS profile (how-to guide).
• For family, friend, or neighbor (FFN) child care workers: If you take care of children who are not your own and are five years of age or younger, track how many hours you spend taking care of them. You can use attendance sheets, the CDEC template, or your own system to keep track of the hours and ages of the children you take care of. This documentation will not be uploaded to the PDIS, but will need to be retained for three years in case you are asked to show it for tax purposes.

If my spouse is also an eligible care worker, can we both receive a tax credit? 

Yes, in the case of a child care worker or qualified direct care worker who files a joint return with another child care or direct care worker, the credit would be $2,400, provided that joint adjusted gross income is less than $100,000.

What is the Professional Development Information System (PDIS)?

The Colorado Shines Professional Development Information System (PDIS) is a one-stop online resource for the early childhood workforce. It is available in English and Spanish and offers a broad range of eLearning courses addressing all aspects of child development, health and safety, and quality instruction. PDIS is designed to support a variety of early childhood professionals at all levels of experience and education, including FFN child care workers.

Individuals can create a PDIS account at any time by visiting Professional Development Information System. Questions can be directed to the PDIS Help Desk at 1-844-447-4441 (select option two) or cdec_pdishelp@state.co.us. 

Any data utilized within the PDIS in a report external to CDEC will not include personally identifiable information. Data will be de-identified and reported in aggregate. CDEC will never sell your data, and any external sharing will be governed by a strict Data Sharing Agreement (DSA). In compliance with section 24-74-103, C.R.S., CDEC will not share any personally identifiable information that is not publicly available for the purpose of investigating for, participating in, cooperating with, or assisting in federal immigration enforcement.

What does a child care worker need to do to claim the credit?

1. By December 31, 2025, early childhood professionals and child care workers must register in the Professional Development Information System (PDIS) and complete an attestation in PDIS (available in fall 2025) to confirm that they have provided care for at least 720 hours in the tax year to children other than their own who are five years of age or younger.
2. In 2026, individuals must file a Colorado Individual Income Tax Return by the due date, even if they do not owe any taxes. Free online tax filing services and free in-person tax help in English and Spanish is available from Get Ahead Colorado/Hacia Adelante Colorado. 

I am a family, friend, or neighbor (FFN) child care provider. What do I need to do now to be eligible for the credit?

FFN providers who meet all of the following requirements are eligible for the Care Worker Tax Credit:

• Have an adjusted gross income less than or equal to $75,000 as a single filer or $100,000 as a joint filer
• Be registered in the Colorado Shines Professional Development Information System (PDIS)
• Have provided child care in their home for at least 720 hours during the tax year to children other than their own who are five years of age or younger 

To receive the credit, you will need to complete these steps:

1. Now: Create a PDIS account now, which will also give you access to a variety of free e-learning courses on child development and health and safety.
2. Starting January 2025: If you take care of children who are not your own and are five years of age or younger, track how many hours you spend taking care of them. You can use attendance sheets, the CDEC template, or your own system to keep track of the hours and ages of the children you take care of. This documentation will not be uploaded to the PDIS, but you will need to retain it for three years in case you are asked to show it for tax purposes.
3. In fall or winter 2025: Log into PDIS to complete the attestation that you have provided care for at least 720 hours in the tax year to children other than your own who are five years of age or younger.
4. In spring 2026: File your state income taxes. To learn more about filing taxes, you can visit the Colorado Department of Revenue’s website and connect with Get Ahead Colorado to help you navigate filing taxes. If you are not eligible to get a Social Security Number, you can apply for an Individual Tax Identification Number (ITIN), which will allow you to file your federal and state taxes and receive your federal and state tax refund. Details on how to apply for an ITIN are available from the IRS.  
    

Are there immigration documentation requirements for the credit?

Individuals must be a Colorado resident to be eligible for the credit. For information on Colorado residency, refer to Part 1 of the Colorado Individual Income Tax Guide. Individuals must have either a Social Security Number or an Individual Tax Identification Number (ITIN) to file a Colorado Individual Income Tax Return and claim the Care Worker Tax Credit. The Internal Revenue Service issues ITINs to taxpayers and more information is available on the IRS website. There are no further immigration documentation requirements.

Will my information be shared with immigration authorities?

No. Because of state law (C.R.S. 24-74-103), personally identifiable information will not be disclosed for the purpose of immigration enforcement, except as required by federal or state law or as required to comply with a court-issued subpoena, warrant, or order.

I provide child care to a family member. Can I claim the Care Worker Tax Credit?

If you provide 720 hours of care annually in your own home for a child who is five years of age or younger, and who is not your own child (i.e. you are not the Legal Guardian of said child), then you are eligible.

I care for four year olds and five year olds through a school district-run before- and after-school program. Can I claim the Care Worker Tax Credit?

To claim the credit, you must be an employee of a licensed child care center, preschool or family child care home with a Colorado Shines rating Level 1-5. To confirm whether your program has a Colorado Shines rating, search for your program on Colorado Shines. 

I provide informal care to children in an unlicensed setting outside of my own home. Can I claim the Care Worker Tax Credit?

To qualify as an eligible family, friend, or neighbor child care worker for the Care Worker Tax Credit, an individual must provide child care in the individual's permanent place of residence when one of the following conditions is met:

1. The children being cared for are related to the caregiver, are children who are related to each other as siblings from a single family that is unrelated to the caregiver, or a combination of such children; or
2. There are no more than four children being cared for, with no more than two children under two years of age from multiple families, regardless of the children's relation to the caregiver.

• Care Worker Tax Credit: Child Care Worker Overview (en español)
• Care Worker Tax Credit: FAQ  (en español)
• Child Care Hours Tracking Template (en español)