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The American Rescue Plan Expanded the Credit to Help Coloradans Cover the Cost of Child Care, Which Averages $12,390 for a 4-Year-Old in Colorado
Colorado U.S. Senator Michael Bennet recently encouraged Coloradans to file their taxes to claim their expanded Child and Dependent Care Tax Credit (CDCTC) to help cover the cost of childcare. In Colorado, the average childcare cost for a 4-year-old is $12,390 per year.
“Families in Colorado and across our nation are facing rising costs, and one of the biggest expenses families have is childcare,” said Bennet. “I’m glad we expanded the Child and Dependent Care Tax Credit through the American Rescue Plan Act, which will help low- and middle-income families cover the cost of childcare to reduce that financial burden and allow parents to stay at work.”
Thanks to the American Rescue Plan Act, the value of the CDCTC is dramatically expanded for this tax year – up to $4,000 per child. It is also now fully refundable, meaning many low-income families can now receive it for the first time, and middle-income families can get a larger refund than ever before. Families can use the CDCTC for out-of-pocket expenses such as center-based care, summer school, or babysitters. Colorado families can claim the expanded CDCTC on their tax returns. More information on the CDCTC is available at irs.gov.
Most Americans can file taxes for free through the Internal Revenue Service (IRS) Free File Program. Additionally, if a family’s income falls below $58,000, they can receive help filing taxes through the IRS’s Volunteer Income Tax Assistance (VITA) sites. Coloradans who qualify for help filing their taxes can visit coloradovita.org for assistance.
The American Rescue Pan Act also expanded the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). More information on eligibility for the CTC and EITC and how to claim the credits is available at childtaxcredit.gov.