Colorado’s Family Affordability Tax Credit will not be available to low-income families for the next two tax years, state economists announced on June 18, 2026. The credit, which cut child poverty in Colorado by 37% the only year it was fully active, requires at least 3% annual revenue growth to trigger. The state is not expected to come close.
The Governor’s Office of State Planning and Budgeting projects revenue growth of just 1.8% and 2.8% for the next two fiscal years. Greg Sobetski, chief economist for the nonpartisan Legislative Council Staff, told the Joint Budget Committee that the official forecast assumes the credit stays off entirely, which in turn inflates projected state revenue because families cannot claim it.
37%
Drop in Colorado child poverty in 2025, the one year the Family Affordability Tax Credit was fully active. Source: Colorado Newsline / Legislative Council Staff testimony, June 18, 2026.
That number carries weight because the credit has only existed since 2024 and has been fully active exactly once. One activation cut child poverty by more than a third statewide. Two consecutive years without it risks erasing that progress entirely.
Colorado’s Legislature Partially Restored the Credit, But Left Families Short
The Colorado Legislature partially revived the benefit this year by redirecting sales tax revenue from downloadable software, which had previously been exempt from taxation. That partial fix means families will receive a few hundred dollars per child next year, far below what the full credit provides.
Efforts to fully fund the credit by decoupling Colorado’s corporate tax code from federal law did not pass this session. That approach would have created a stable, independent revenue source for the credit. Without it, the credit remains dependent on volatile annual revenue growth hitting an arbitrary threshold.
“We’re in a position where revenue is hitting just right for the (Fiscal Year 2027-2028) budget to be the best-case scenario I can be presenting to you right now.”
Greg Sobetski, Chief Economist, Colorado Legislative Council Staff, June 18, 2026
The “best-case scenario” framing reflects how thin the fiscal margin actually is. Colorado lawmakers cut approximately $1 billion to balance the current budget. The OSPB forecasts modest surpluses over the Taxpayer’s Bill of Rights cap ($470 million in the upcoming fiscal year, $52 million the year after), but those figures shrink if the credit activates, creating a structural disincentive to fund it.
December 2026 Forecast Is the Next Hard Deadline
The availability of the credit for 2027 will be officially determined during the December 2026 economic forecast. If revenue projections improve enough to clear the 3% growth threshold, the credit could turn back on. If projections hold, families lose two full years of support with no guaranteed path to restoration.
The bipartisan Joint Budget Committee, a six-member panel that crafts the state budget, hears four economic forecasts per year. Lawmakers on that committee have direct authority over whether alternative funding mechanisms for the credit move forward in the next legislative session.
What you can do now
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Call your Colorado state legislators at (303) 866-2904 (the general assembly switchboard) and ask them to reintroduce the corporate tax decoupling bill that failed this session. Tell them specifically: one year of the full credit cut child poverty by 37%, and two years without it risks reversing that entirely. Find your specific legislator at leg.colorado.gov/find-my-legislator.
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Contact the Joint Budget Committee directly. The six members who craft the state budget can prioritize a stable revenue source for the Family Affordability Tax Credit before the December 2026 forecast locks in projections. Reach the committee through the Colorado General Assembly at (303) 866-2061 and ask them to consider the poverty impact of extended inactivation.
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Submit public comment to the Governor’s Office of State Planning and Budgeting before the September 2026 economic forecast, which will update revenue projections. Visit colorado.gov/pacific/ospb/contact and ask OSPB to include a child poverty impact analysis in future forecast documents.
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Ask your state senator or representative to co-sponsor a standalone FATC funding bill for the 2027 legislative session. The credit was funded this year through a patchwork of redirected tax revenue. A dedicated, permanent funding stream would remove it from the annual revenue-growth trigger entirely.
Sources
Colorado Legislative Council Staff: Economic and Revenue Forecast, June 2026
Colorado Governor’s Office of State Planning and Budgeting: Revenue Forecasts
Colorado General Assembly: Family Affordability Tax Credit (HB24-1311)
Colorado Fiscal Institute: TABOR and State Revenue Limits Explained