Why only four days left? Because when the credit was renewed in 2008, the State Legislature put in a limitation: starting in 2011, the state’s budget office must forecast that the state will run a surplus in a given year in order for the credit to be available. The forecast is made before the end of each prior year (in this case, 2010), and the forecast for 2011 is for a deficit. So, the credit won’t be available for 2011.
The Colorado Child Care Contribution Credit (known as “5C”) makes a gift to a qualifying organization incredibly tax efficient. This means that for a typical taxpayer, a $1,000 gift costs the same after tax savings as a $288 gift to a non-qualifying organization: $203.
Child Care Contribution Credit Tax Savings*
(Example assumes 25% Federal tax bracket and taxpayer itemizes deductions.)
|Without 5C||With 5C|
|Colorado Child Contribution Tax Care Credit (50%)||$0||$500|
|Charitable Deduction Federal Tax Savings||$72||$250|
|Charitable Deduction Colorado Tax Savings||$13||$47|
|After Tax Costs of Gift
Situations vary; donors should consult their tax advisors for advice about how the credit affects their tax picture. *Example courtesy of Allied Jewish Federation of Colorado.
So, please give this some thought as the clock ticks down on 2010. Boulder organizations that qualify for the Colorado Child Care Contribution Credit include the Boulder Jewish Community Center and the Boulder Jewish Day School. Please visit their web sites to learn more. But don’t delay… just four days left.