Colorado Family Tax Credit Faces Jeopardy Amid Budget Uncertainty

A report from the Colorado Children’s Campaign and Columbia University’s Center on Poverty and Social Policy found that the Colorado Family Affordability Tax Credit pulled 22,500 children out of poverty in its first year of implementation. The credit, which was available for the 2024 and 2025 tax years, is predicted by nonpartisan state analysis to likely not be available for the 2026 tax year, or if it is, it will be underfunded. The availability of the credit will be officially determined during the December economic forecast.

The tax credit is described as Colorado’s most effective tool for reducing child poverty. The potential loss or underfunding of this state-level credit could impact the financial resources available to low-income families in Colorado.