When you file your tax return, you\u2019re likely made aware of whether or not you qualify for a federal earned income tax credit (EITC), and if so, you may also be eligible to receive one on the state level. Taxpayers who live in Colorado follow the federal government\u2019s eligibility requirements. The state EITC offers a credit based on 10% of the federal credit amount.<\/p>\n
Colorado\u2019s state EITC is fully refundable as well, which means that the credit can be greater than the residents\u2019 annual income tax liability. Any amount exceeding the income tax due is paid to the Colorado taxpayer as a refund, and any Colorado family without income tax liability can receive the entire EITC amount as a refund.<\/p>\n
Colorado\u2019s EITC takes effect once the state revenues exceed the revenue limit for the state, also known as TABOR.<\/p>\n
This concept of refundability is what is at the heart of the earned income tax credit. By allowing lower income families to receive the credit amount as a refund after offsetting the amount of owed taxes, it allows families to keep a larger portion of their earnings. This helps keep state poverty levels lower. The Earned Income Tax Credit covers a portion of state taxes which can be a substantial expense for working class families, and can take a little burden off the average taxpayer.<\/p>\n","protected":false},"excerpt":{"rendered":"
When you file your tax return, you\u2019re likely made aware of whether or not you qualify for a federal earned income tax credit (EITC), and if so, you may also be eligible to receive one on the state level. Taxpayers who live in Colorado follow the federal government\u2019s eligibility requirements. The state EITC offers a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[126],"tags":[233,487],"class_list":["post-901","post","type-post","status-publish","format-standard","hentry","category-states","tag-colorado","tag-state-eitc"],"yoast_head":"\n