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Hello and welcome to … “In the Know With Keirin.” My name is Keirin Gonzalez, and I am the graduate policy intern with Colorado Fiscal Institute. I am beyond excited to be sharing some bites of knowledge for the rest of the legislative session. Specifically, we are going to zoom in on refundable tax credits like the Family Affordability Tax Credit (FATC), their positive impacts for Colorado families, and the harm of losing some of these credits this year.
The FATC is a refundable cash-back credit that gives direct money to eligible lower- and middle-income families. Families see an average FATC credit amount of around $2,862. In just one year, the FATC reached 331,381 families and 48% of all kids here in Colorado, totaling around 586,999 children.
“The Family Affordability Tax Credit has been a lifeline for families like mine. It has helped us cover important expenses and has given us the ability to invest in opportunities that support our children’s learning and development.” — Kameo Thomas (working parent and parent ambassador at Clayton Early Learning)
Despite the reach of the FATC, around one-third of eligible families did not receive the credit because they were unaware of it. This implies the FATC has the possibility to reach and support even more families and children here in Colorado.
In a single year, the FATC itself reduced the child poverty rate by 20%. In combination with existing credits like the Child Tax Credit and the Earned Income Tax Credit, Colorado saw a 37% decrease in its total child poverty rate. This led Colorado to have the lowest child poverty rate in the nation.
“It allows me to focus on my work and on raising my children without constantly worrying about how I will cover the next unexpected expense.” — Teronica Williams (working parent and parent ambassador at Clayton Early Learning)
Unfortunately, the FATC is now unavailable for 2026, 2027, and 2028 due to the revenue harm caused by H.R. 1. Outside of their experience with the FATC, families find themselves negotiating limited resources, rising prices, and unstable income. In a time where FATC helped families pay for necessities like bills, housing, and everyday needs, families return to the financial stress of living in an unaffordable time.
“Without this credit, many families like mine would feel the impact immediately. Losing this support would mean making harder choices between basic needs and opportunities that help our children thrive.” — Teronica Williams (working parent and parent ambassador at Clayton Early Learning)
With the FATC gone, Colorado communities and economy are set to be largely impacted. Lower- and middle-income earners have a higher return to the local economy. With money missing in the pockets of those families, local resources and businesses are expected to have less traffic and fewer sales, harming our overall economy.
“When families have economic stability, children perform better in school, parents stay attached to the workforce, and communities and the economy are stronger. For Colorado to be a state where families can afford to live, work, and age with dignity, we must prioritize policies that reflect that commitment.” — Louise Myrland (vice president of programs, The Women’s Foundation of Colorado)
That is why it is important to advance and support our four-bill package that makes credits like the FATC permanent for our families in Colorado. In a time of growing unaffordability, we must invest in Colorado families who need it most.
