Policy Resource

Colorado Reforms Child Care Subsidy Program

Sep 1, 2017

The Colorado legislature passed three bipartisan bills to reform the state’s child care subsidy program in May 2014. The bills aimed to increase the affordability of child care, ease burdens for working parents, and cut red tape for small business child care providers.

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to families who are working, searching for employment, or are in training, and families who are enrolled in the Colorado Works program and are in need of child care services to support their efforts towards self-sufficiency. CCCAP provides access to reduced cost child care at licensed child care facilities or qualified, unlicensed, providers. Counties across Colorado serve families with income of 165% or less of the federal poverty guideline, as long as funding allows, and cap the benefit for families with an income of over 85% of the state median income.

Specific changes to the program include:

  • Reducing co-payment requirements for the most impoverished families,
  • increasing access to care by allowing contracting for subsidy slots,
  • expanding eligibility during 60-day job searches and to those participating in postsecondary education and workforce training,
  • increasing provider reimbursement rates, instituting tiered reimbursement for providers statewide, and
  • restructuring income eligibility so that working families can afford child care despite minor increases in wages, thus easing the cliff effect that discourages families from earning a higher salary.

Legislation was also passed that year to extend the state’s reimbursable child care expenses tax credit. In 2018 the legislature approved an extension of the tax credits when they were due to sunset the previous year. The extension helps those making $25,000 or less who qualify for the federal Child Care Expenses Tax Credit by providing a specific tax credit for those with incomes of $25,000 or less equal to 25% of their child care expenses capped at $500 for one dependent and $1,000 for two or more dependents. Increasing the state tax credit for child care expenses as a percentage of the federal tax credit and extending eligibility to those with middle incomes and higher will also help more families in Colorado afford child care.

Colorado has continued to make investments in its child care subsidy system since these reforms, by increasing investments in the program to institute reforms and increase reimbursement rates for providers.

Updated July 2019

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