HB23-1112 Summary

• Increases the Colorado earned income tax credit from 10 percent to 25 percent of the federal credit for tax years 2023-2025, and to 38 percent for tax year 2024.

• Expands earned income tax credit eligibility to include individuals who cannot claim the federal credit because they or their dependents lack valid employment social security numbers, at the same percentage levels (25 percent for 2023-2025, 38 percent for 2024).

• Restructures the child tax credit beginning January 1, 2024, creating income-based tiers: $1,200 for single filers earning ≤$25,000 (joint filers ≤$35,000); $600 for earnings $25,001-$50,000 (joint $35,001-$60,000); $200 for earnings $50,001-$75,000 (joint $60,001-$85,000), with no credit above these thresholds.

• Requires the Department of Revenue to adjust income thresholds annually for inflation beginning in 2025, if cumulative inflation results in an increase of at least $1,000 when rounded to the nearest thousand dollars.

• Takes effect 90 days after final adjournment, subject to voter approval if a referendum petition is filed within that period.