5C - Colorado Child Care Contribution Credit
What is 5C?
The Colorado Child Care Contribution Credit (5C) was created to encourage private support of Colorado preschool programs, like Har Shalom's Preschool. Because identified monetary contributions to Har Shalom Center for Jewish Living qualify for this tax credit, you may be able to decrease the after-tax cost of your gifts by more than 50%.*
How 5C Can Lower Your Colorado State Tax Liability
The effect of the credit is that half of your donation – as long as it is designated for the credit – is offset by a reduction of your Colorado income taxes. You will still be able to claim your full contribution as a charitable deduction on your Federal and State income tax returns if you itemize deductions, meaning your donation earns even greater returns!
| $500 donation | = $250 tax credit |
| $1800 donation | = $900 tax credit |
| $15,000 donation | = $7,500 tax credit |
| $100,000 donation | = $50,000 tax credit |
The effect of the credit is that half of your donation – as long as it is designated for the credit – is offset by a reduction of your Colorado income taxes. You will still be able to claim your full contribution as a charitable deduction on your Federal and State income tax returns if you itemize deductions, meaning your donation earns even greater returns!
State Guidelines
- The maximum credit you may take in any one year is $100,000 or your actual Colorado income tax liability for the year, whichever is less. However, any unused credit may be carried forward for up to five additional tax years.
- Only monetary donations are eligible. In-kind gifts, such as stock or other securities, donor advised funds, labor, or equipment do not qualify, nor do any payment for services. However, distributions, including required minimum distributions, from an IRA are eligible.
- Click here to be redirected to the State of Colorado's website for more information.
How it Works at Har Shalom
- Har Shalom uses 5C donations to underwrite the administrative work of running the preschool and facilities upkeep.
- We will process 5C statements for any unrestricted gift specifically designated for Har Shalom Preschool of $500 or more. Please note that this includes cumulative gifts given over a calendar year.
- IMPORTANT: Please write “Colorado Child Care Contribution Credit” or “5C” in the memo line of your check. If giving online, please note that your gift is for the Colorado Child Care Contribution Credit (5C) option.
- As required by law, in January of each year, Har Shalom will provide each donor with a signed statement confirming the amount of the monetary contribution eligible for the credit and the eligible purpose for which the contribution will be used.
*We always recommend that you consult with your tax adviser to determine how the credit will specifically benefit you.