Family Affordability Tax Credit Helping Reduce Child Poverty in Colorado

New research led by Appalachian State University and Washington University in St. Louis highlights how Colorado’s Family Affordability Tax Credit (FATC) led to a 20% reduction in child poverty, and when paired with Colorado’s Child Tax Credit and Earned Income Tax Credit, child poverty dropped by nearly 40%. 

What Is FATC and Who Is Eligible?

Passed by the Colorado legislature in 2024, FATC allows eligible families with children under 17, including those with low to moderate incomes, to claim a refundable, per-child credit. The credit is one of the most expansive state-level child tax credits in the country as nearly half of all Colorado families with children are eligible. 

Families with eligible children age 5 and younger may also qualify for the Colorado Child Tax Credit. 

In 2025, families received $7,000 from FATC, on average. Many families used it for utilities, food, school supplies, school activities, and housing. 

According to the Colorado Department of Revenue website: 

• For the Colorado Child Tax Credit, children must be under age 6 at the end of tax year, and Adjusted Gross Income (AGI) must be $75,000 or less ($85,000 if filing jointly).
• For the Family Affordability Tax Credit, the child must be under age 17 at the end of the tax year, and Adjusted Gross Income (AGI) must be $85,000 or less ($95,000 if filing jointly).

Both credits are refundable, meaning that even if no tax is owed, families can receive the credits as a refund. 

“Colorado had the most effective child poverty impacts of any other state tax credit or refundable family tax credit,” said Leah Hamilton, report co-author, in a recent Denver Post article.

More than 330,000 families claimed the FATC credit during the first year it was available. With just more than on in 10 of those families also receiving both the Earned Income Tax Credit and Child Tax Credit, this shows that FATC fills critical gaps in assistance for families, rather than duplicating existing supports.

Colorado’s Child Poverty Rate Greatly Improves

Together, the credits contributed to Colorado’s child poverty rate dropping to 7.3%, down from 11.6% before the credits, according to the study. Read more about the study and results from in Gary Community Ventures’ “CO Has The Lowest Child Poverty Rate In The Country” blog post. 

Download the research overview
Read the full report

If you need help claiming available credits and filing your taxes, visit GetAheadColorado.org.