- What is the Colorado early childhood refundable income tax credit?
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In 2022, the Colorado Legislature passed and the governor signed House Bill 22-1010 (HB22-1010), which created what is known as a refundable income tax credit for credentialed early childhood educators. A refundable income tax credit is when an amount is payable to a taxpayer even in the event the credit is more than the taxpayer’s income tax balance due. The refundable tax credit first pays for whatever taxes are owed (if any) and then any extra is awarded to the taxpayer as a refund payment. Learn more about refundable income tax credits.
- How much is the tax credit and who qualifies?
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Early childhood educators who hold an active PDIS Early Childhood Credential (ECPC) in either Version 2.0 or 3.0 qualify for the tax credit. Qualifying individuals will be awarded a tax credit amount based on the highest credential level held during the 2022 calendar year on the following scale:
ECPC Level 1, either version 2.0 or 3.0 = $750
ECPC Level 2, either version 2.0 or 3.0 = $1,000
ECPC Levels 3-6, either version 2.0 or 3.0 = $1,500
Tax credit amounts may change some for the 2023, 2024, and 2025 tax years based on inflation.
The tax credit takes effect for this tax year (2022). Qualifying early childhood educators are eligible to receive the 2022 refundable income tax credit after they file their taxes by the due date that falls in 2023.
If you and your spouse are both qualifying Early Childhood Professionals and file jointly, the amount of credit you are eligible for and may claim is the sum of the amounts for each of your individual credential levels.
- What do early childhood educators need to do to receive the refundable income tax credit?
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To receive the refundable income tax benefit offered by HB22-1010, early childhood professionals must have:
- An active PDIS Early Childhood Professional Credential (ECPC), Version 2.0 or 3.0, Level 1-6 at any point in the 2022 year; and
- Worked for at least six months in a licensed child care center or family child care home; and
- An individual adjusted gross income of less than or equal to $75,000 or joint adjusted gross income of less than or equal to $150,000.
Individuals must also file taxes to receive the credit, even if they don’t owe any taxes. To learn more about filing taxes, you can visit the Colorado Department of Revenue’s website and connect with organizations in your community that can help you navigate filing taxes.
Finally, to be eligible for this tax credit, your Colorado Shines PDIS profile should be up to date. Be sure the following are correct:
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First and last name
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Verified employment
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Job role
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Social security number (SSN), or Individual Tax Identification Number (ITIN)
You can review and edit your PDIS profile by going to Menu > My Profile > Employment.
PDIS How-To Guide: Updating “My Profile”
The Department of Early Childhood will prioritize credential reviews for PDIS users who do not have an active 2.0 or 3.0 credential in 2022. If you had an active Level 1-6 Early Childhood Professional Credential in 2022 you are already eligible for the Early Childhood Educator Tax Credit and do not need to submit a new application for this purpose.
We recommend all PDIS users interested in the Tax Credit revisit and complete your PDIS account profile to include a Social Security Number (SSN) or Individual Tax Identification Number (ITIN) to assist the Colorado Department of Revenue in matching this credit to your tax information.