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Claiming the Child Care Contribution Credit in Colorado: A Step-by-Step Guide

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Tax season can be overwhelming, but understanding the credits available to you can help ease the financial burden. One such benefit in Colorado is the Child Care Contribution Credit, which incentivizes contributions to child care facilities and programs. Here’s how to claim this credit during tax season when you donate to Big Brothers Big Sisters of Colorado during Colorado Gives Day or in the year 2024.

What is the Child Care Contribution Credit?

The Child Care Contribution Credit is a tax credit designed to encourage donations to child care facilities that provide care for children aged 0-5 or to organizations that help fund such care. This credit can be particularly beneficial for individuals or businesses looking to support early childhood education and care programs, like the work being done every day at BBBSC.

Who Can Claim the Credit?

Both individuals and businesses can claim the Child Care Contribution Credit. To be eligible, you must make a qualifying donation to an eligible organization. These can include:

  • Licensed child care centers
  • Preschool programs
  • Organizations that provide financial support for child care services

Big Brothers Big Sisters is a grandfathered organization (DR 1319).

Child Care Contribution Tax Credit information

 

 

 

 

 

 

Under “The contribution will be used,” select “For the establishment or operation of a child care facility in the state that uses the donation to provide for child care.”

 

 

Steps to Claim the Child Care Contribution Credit

1. Make a Qualifying Contribution

First, ensure your donation is made to an eligible organization (which Big Brothers Big Sisters of Colorado qualifies as!) Keep all receipts and documentation of your contribution, as you’ll need this for your tax return.

2. Obtain Documentation

Once you’ve made your donation, obtain a written statement from the organization confirming the contribution. This should include:

  • The name and address of the organization
  • The amount donated
  • A description of any in-kind contributions
  • A statement confirming that no goods or services were received in exchange for the contribution (if applicable)

To receive your needed documentation including the signature of our CEO, Elycia Cook, email development@biglittlecolorado.org 

3. Complete the Necessary Tax Forms

To claim the credit, you’ll need to complete the Colorado Department of Revenue Form DR 1317, which is specifically for the Child Care Contribution Tax Credit Certificate. Here’s how to fill it out:

  • Part 1: Provide your personal information.
  • Part 2: Enter the amount of your contribution.
  • Part 3: Calculate your credit based on the percentage of your contribution.

The credit is typically a percentage of your qualifying donation, which is 50%.

4. File Your Colorado Tax Return

Once you’ve completed Form DR 1317, you’ll need to attach it to your Colorado tax return. Make sure to keep a copy of all documents for your records.

5. Consult a Tax Professional if Needed

If you’re unsure about any part of the process or need clarification on eligibility, consider consulting a tax professional. They can provide personalized guidance and ensure that you’re taking full advantage of available credits.

Important Deadlines

Be mindful of tax deadlines! Ensure you make your contributions and file your tax return by April 15 of the following year to qualify for that tax year’s credit.

Conclusion

Claiming the Child Care Contribution Credit in Colorado can provide significant tax savings while supporting the important cause of defending the potential of Big Brothers Big Sisters of Colorado youth. By following these steps, you can simplify the process and ensure you’re taking full advantage of this valuable credit. Happy tax season!

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