The Colorado Child Care Contribution Credit was established to encourage greater private support of Colorado child care programs, like those provided by Boys & Girls Clubs of Northwest Colorado. 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 the Boys & Girls Clubs of Northwest Colorado 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 show 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 BGCMD |
$326.66 |
$303.98 |
$294.91 |
| Total Tax Saving |
$673.34 |
$696.02 |
$705.10 |
*Lower State income taxes mean lower State tax deductions for Federal tax purposes.
Guidelines
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The maximum credit you may take in any one year is $100,000 or your actual Colorado income tax liability for the year, whichever is less. However, any unused credit may be carried forward for up to five additional tax years.
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Only monetary donations are eligible. In-kind gifts, such as stock or other securities, labor, or equipment do not qualify for the tax credit.
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Contributions for which an Enterprise Zone Credit is taken are not eligible for this credit.
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In the case of donations associated with fundraising dinners, golf tournaments, or other events, only the deductible portion of your payment to Boys & Girls Clubs of Metro Denver, reduced by the value of goods and services you received, will be eligible. In these cases, you will be advised of the net amount eligible for the credit.
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As required by law, Boys & Girls Clubs of Northwest will provide each donor with a signed statement confirming the amount of the monetary contribution eligible for the credit and the eligible purpose for which the contribution will be used.
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For more information, please call 970-826-0411.