February 7, 2026, 5:03am MT
A new tax credit is being introduced in Colorado for this filing season, contingent on the state meeting certain revenue levels.
The Family Affordability Tax Credit is aimed at low-income families with children, potentially providing significant deductions—ranging from hundreds to thousands of dollars—depending on individual circumstances.
As tax season approaches, it’s worth knowing if you qualify and how much you might be able to save.
Who qualifies for the Family Affordability Tax Credit?
For eligibility, single filers need to have a federal adjusted gross income (AGI) of $85,000 or less, while joint filers must have an AGI of $96,000 or less.
Additionally, applicants must claim children under 16 who lived with them for at least half of the year.
How much can you receive?
The amount you can deduct varies based on your child’s age and your adjusted gross income.
For instance, families with children aged 6 to 16 may receive between $92 and $2,455 per child, contingent on income.
For younger children, those 5 and under, the credit can range from $123 to $3,273 per child.
This credit is refundable, which means you can receive the full amount even if it exceeds your tax liability.
Why is the Family Affordability Tax Credit in place?
Established by Congress in 2024, the Family Affordability Tax Credit is projected to cost around $700 million to implement.
While it’s not a TABOR refund, it does provide direct benefits for some Colorado families.
In fact, it influences TABOR refunds by helping to reduce the amounts that would typically return to taxpayers.
The Taxpayer Bill of Rights (TABOR) mandates that states must return funds when revenue exceeds certain thresholds.
Because these credits don’t count as state spending, they’re not subject to the TABOR requirements.
This credit is expected to remain effective until 2034, assuming state revenue stays above a set level. The credit’s size will also depend on how rapidly state revenue grows.
What distinguishes this from the Colorado Child Tax Credit?
In contrast to the Family Affordability Tax Credit, the traditional child tax credit is available without regard to state revenue and comes with lower income limits, focusing specifically on younger children.
Parents of children under 5 can qualify if their AGI is $77,000 for single filers or $87,000 for joint filers.
The amounts available through this credit are $200, $600, or $1,200 per child, depending on income levels.
