This story by Sara Wilson appeared on Colorado Newsline on May 10, 2024.
Predictably, lawmakers entered the 2024 legislative session with a focus on affordability for Coloradans, as average costs continue to rise for housing, groceries and other living expenses.
They did so by passing a series of tax credits and tax-related fiscal measures that seek to keep more money in people’s pockets or find a way to return it during tax season.
“Because of our work, the future is brighter, especially for our children and families. We increased tax credits for hardworking Coloradans and families with children, putting hundreds of millions back into the pockets of the people feeling the brunt of the high cost of living in this state,” House Speaker Julie McCluskie, a Dillon Democrat, said after the session concluded.
House Bill 24-1311: Child poverty reduction
The new Family Affordability Tax Credit will be available to families with children up to 16 years old as an effort to dramatically reduce childhood poverty. The credit amount would depend on income, inflation and economic growth and would be a maximum of $3,200. It will be available to single filers who make up to $75,000 or joint filers who make up to $85,000.
“There are over 133,000 Colorado kids living in poverty, and this bill, coupled with the Earned Income Tax Credit, will dramatically cut our child poverty rate,” bill sponsor Rep. Jenny Willford, a Northglenn Democrat, said in a statement following its House passage. “These tax credits boost the incomes of our lower and middle-income families so they can keep their children safe and healthy by accessing quality health care, school supplies, and fresh food.”
The bill has not yet been signed by the governor.
House Bill 1052: Senior housing income tax credit
Under this bill, qualifying seniors aged 65 and older who make under $75,000 will be able to claim a tax refund up to $800 for the 2024 tax year. Those who claim a homestead property exemption would not be eligible.
Seniors who receive a property tax and rent assistance grant or heat assistance grant can get the maximum refund regardless of income.
This bill passed with near unanimous, bipartisan support.
It has not yet been signed into law by the governor.
House Bill 24-1134: EITC expansion
This bill implements a few tax-related adjustments, including expanding the state’s Earned Income Tax Credit for low-income households. It would set that credit at 50% of the federal EITC for 2024, 35% for 2025 and at least 30% for 2026 and beyond. The credit could go back up to 50% in years with strong economic growth. It would apply to households that make up to $65,000.
The bill also merges the Child and Dependent Care Tax Credit and the Low-income Child Care Expenses Tax Credit and creates the Child and Dependent Care Tax Credit. That new tax credit expands the state’s scope of qualified dependent to match the federal definition. It would apply to taxpayers who make up to $60,000.
The bill has not yet been signed by the governor.
Senate Bill 24-228: Temporary income tax cut
This bipartisan bill would create temporary income tax cuts in years when the state collects a certain amount of revenue over a state constitutional cap as a method to refund money to taxpayers. This year, for example, it would cut the income tax rate from 4.4% to 4.25% for about $450 million in relief.
If the revenue surplus is above $1.5 billion, the sales tax rate would be cut under the bill as well.
The bill has not yet been signed by the governor.
Senate Bill 24-233: Property tax cut
This property tax bill came at the tail end of session after months of work from the bipartisan Property Tax Commission. This year, the bill will cut residential property assessment rates and save homeowners a few hundred dollars.
It caps local property tax growth at 5.5% starting in 2025. It will also decouple assessment rates for school districts and other taxing districts, putting school districts at a flat 7.15% assessment rate and other entities at 6.95%. It will also set an annual revenue growth cap at 5.5%.
Additionally, it will exempt 10% of the value of homes under $700,000.
The bill will not take effect if voters pass a property tax-related ballot measure this November.
“I’m proud that we have come up with a long-term, bipartisan solution that will save Colorado homeowners and small businesses money on property taxes,” bill sponsor Rep. Chris deGruy Kennedy, a Lakewood Democrat, said in a statement after its passage in the House. “This legislation will responsibly reduce property taxes in a meaningful way to save people money while protecting school funding.”
The bill has not yet been signed by the governor.