If you provided child care this year, you might be eligible for a new tax credit
DENVER — Licensed child care workers and informal child care providers, like grandparents or neighbors, can now qualify for a $1,200 tax credit. Direct care workers for people in long-term care can also qualify.
As child care costs continue to soar and enrollment in government-funded programs remains frozen in many counties, most Colorado parents rely on family, friends or neighbors for child care. These informal caretakers are also called FFN providers.
If you provided at least 720 hours of child care in the 2025 tax year to children five years or younger, and your household income is $75,000 or below ($100,000 or below for joint-income households), you are eligible for the Care Worker Tax Credit.
You don’t have to be licensed, but you must be registered at the Colorado Shines Professional Development Informational System (PDIS) by the time you file. After making an account on PDIS, you’ll fill out an attestation to confirm the number of hours of child care you provided. From there, make sure you file form DR 1217 with your state income tax return. If you already filed without this form, you can file an amended state tax return.
The Colorado Child Care Assistance Program (CCCAP) helps cover child care costs for low-income families, but in January 2025, it halted further enrollment in the program due to an increase in child care costs that the state can’t afford. Without CCCAP to foot part or all of the bill, parents can’t afford to pay the child care centers on their own. The families are losing child care, while the centers are losing business, leading to closures and program cuts at licensed centers.
In most Colorado counties, there aren’t enough available seats at licensed child care centers for children 6 years and younger. FFN providers, whether it’s an uncle who offers care for free or a certified, license-exempt provider running a business from her home, are filling that gap.
You can find more information and resources about qualifying for the Care Worker Tax Credit here.
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