39-22-119.5 Low-Income Child Care Expenses Tax Credit. Basis and Purpose. The bases for this rule are sections 39-21-112(1) and 39-22-

119.5, C.R.S. The purpose of this rule is to describe the proper apportionment of the low-income child care expenses tax credit allowed to part-year Colorado residents. (1) In the case of a part-year Colorado resident, the allowable low-income child care expenses tax credit shall be apportioned by multiplying the credit otherwise calculated pursuant to section 39-22-119.5, C.R.S., by the ratio determined under section 39-22-110(1), C.R.S.; except that the ratio for apportioning the low-income child care expenses tax credit may not exceed 100%, even if the ratio determined under section 39-22-110(1), C.R.S., exceeds 100%. (a) Example 1. Taxpayer A is a part-year Colorado resident in tax year 2020. Their apportionment ratio determined pursuant to section 39-22-110(1), C.R.S., is 60%. Taxpayer A satisfies the requirements for the low-income child care expenses tax credit pursuant to section 39-22-119.5, C.R.S. Taxpayer A’s child care expenses in 2020 were $2,000. The Colorado low-income child care expenses tax credit allowed to Taxpayer A is calculated first by multiplying the $2,000 in child care expenses by 25%, pursuant to section 39-22-119.5(3)(b), C.R.S., and then multiplying the result ($500) by the 60% apportionment ratio, pursuant to section 39-22- 119.5(6), C.R.S. Taxpayer A is allowed a Colorado low-income child care expenses tax credit of $300. (b) Example 2. Taxpayer B is a part-year Colorado resident in tax year 2020. Their apportionment ratio determined pursuant to section 39-22-110(1), C.R.S., is 110%. Taxpayer B satisfies the requirements for the low-income child care expenses tax credit pursuant to section 39-22-119.5, C.R.S. Taxpayer B’s child care expenses in 2020 were $2,000. The Colorado low-income child care expenses tax credit allowed to Taxpayer B is calculated first by multiplying the $2,000 in child care expenses by 25%, pursuant to section 39-22-119.5(3)(b), C.R.S., and then multiplying the result ($500) by the 100% apportionment ratio, pursuant to section 39-22- 119.5(6), C.R.S., and paragraph (1) of this rule, because the apportionment ratio determined pursuant to section 39-22-110(1), C.R.S., exceeds 100%. Taxpayer B is allowed a Colorado low-income child care expenses tax credit of $500.