The Colorado Child Care Tax Credit allows for a 50% credit toward your State of Colorado income tax liability up to $100,000 annually. This tax credit is available for individuals and businesses, and any unused portion of the tax credit may be carried forward for up to five years. Below are some sample contribution amounts and the actual net cost of that donation after Federal and State of Colorado income tax deductions and Colorado Child Care Tax Credits have been applied. Take a close look at the significant difference between your contribution and the actual net cost of that contribution. This tax credit is a very important feature to many donors and an important revenue source for Colorado’s child care sector.