Senate Passes Bill to Double Colorado’s Earned Income Tax Credit
Legislation raises Colorado’s EITC federal match by 25 percent
DENVER, CO – Today, the Senate passed Senators Chris Kolker, D-Littleton, and Rhonda Fields’, D-Aurora, bill to boost the Colorado Earned Income Tax Credit (EITC) and deliver significant economic assistance to lower-income Coloradans.
HB23B-1002 proposes increasing Colorado’s EITC for the 2023 tax year to 50 percent of the federal credit. The EITC increases after-tax income for lower-income households, which decreases economic disparities and helps make Colorado more affordable. The bill aims to refund $185 million in TABOR surplus in a more equitable way that helps Coloradans who are struggling to make ends meet. The increased EITC match would boost the incomes of working individuals and families by hundreds and in some cases over $1,000 for the 2023 tax year.
“Coloradans' budgets are stretched thin due to inflation and rising costs, with low-income earners being the most vulnerable to poverty and homelessness,” said Kolker. “The Earned Income Tax Credit is proven to put money back into the pockets of hardworking families and lift people out of poverty. With this bill, we can provide critical benefits to help those who need them most.”
“Expanding these tax credits will put $185 million back into the pockets of hardworking Coloradans,” Fields said. “Colorado’s Earned Income Tax Credit especially helps families of color and renters – like those in communities I represent – so they can afford necessities like rent and groceries. This bill will improve equity and help those who are struggling to make ends meet.”
Over the last four years, Colorado Democrats have closed tax loopholes for the very wealthy in order to increase the state EITC from 10 percent of the federal credit to its current 25 percent. Analyses suggest that lower-income Black, Hispanic, multiracial individuals, women, and those living with a disability are more likely to benefit from the EITC.
HB23B-1002 now heads to the Governor’s desk for signature. You can follow the bill’s progress HERE.