Child Care Contribution Tax Credit

Important 2011 Update on the CO Child Care Contribution Tax Credit

The 2011 Colorado Child Care Contribution Tax Credit has been deferred for the 2011 tax-year based on Colorado Tax Revenue Estimates. While the credit cannot be claimed on your 2011 taxes, a donation made this year may be carried forward and claimed in a future tax-year when the credit is reinstated.

We held off sending the tax forms this year because we were waiting for the outcome of proposed legislation that would have cancelled the revenue growth requirement, and thus cancelling the deferral. Unfortunately, the measure failed, and the deferral is in place.

Link to the Colorado Dept. of Revenue FYI 35, explaining the tax credit

The Boys & Girls Clubs of Larimer County (BGCLC) encourages donors to increase their gift and benefit from a 50% Colorado Tax Credit. The credit is available to donors who make monetary contributions to the Boys & Girls Clubs of Larimer County.

The Colorado Child Care Contribution Tax Credit was established to encourage greater private support of Colorado child care programs, like those provided by the Boys & Girls Clubs of Larimer County. Because monetary contributions to the Clubs qualify for this tax credit, you may be able to decrease the after-tax cost of your gifts by more than 50 percent.

The effect of the credit is that half of your donation to BGCLC is offset by a reduction of your Colorado income taxes. You will still be able to claim your full contribution as a charitable deduction on your Federal and State income tax returns if you itemize deductions. Examples of the total impact on your taxes are shown in the chart below. As always, you should consult with your tax advisor to determine how the credit will affect you personally.

Tax Saving Examples
(Illustration only; please consult with your tax advisor.)

Federal Income Tax Bracket	28%	33%	35%
Contribution	$1,000	$1,000	$1,000
Colorado Child Care Credit	($500)	($500)	($500)
Charitable Deduction Colorado Tax Saving	($46.30)	($46.30)	($46.30)
Charitable Deduction Federal Tax Saving	($280)	($330)	($350)
Related Federal Tax Effect*	$152.96	$180.28	$191.21
After Tax Costs of Gift to BGCLC	$326.66	$303.98	$294.91
Total Tax Saving	$673.34	$696.02	$705.10