In 1992 the State Legislature approved the Child Care Facility Investment Credit. This credit allows the owners of licensed child care facilities, family care homes, and foster care homes a tax credit for 20% of their investment in tangible personal property and equipment.
Don't have a tax liability this year? A credit can carry forward for 3 years. Talk to your accountant.
ALSO, know that HB22-1025 is proposing to remove this investment credit from the statutes because it has been underutilized. ECEA is advocating for the Investment Credit to remain in the statutes and is committed to educating programs on their ability to use this tax credit. PLEASE have a conversation with your Accountant/Tax Preparer. The statute number is listed in the heading of this article.
Documentation for the Credit: "For a pass-through entity, the credit is taken on line 21 of FORM 104CR on the Colorado personal tax return. It reads, “Child Care investment credit, you must submit a copy of your facility license and a list of depreciable tangible personal property with your return.” I have included fixed asset purchases as well as equipment purchased and expensed with an expected useful life exceeding one year. I was challenged for a couple of years and argued successfully." Beverly Maxwell, ECEA Treasurer.