The child tax credit statute allows taxpayers to claim a credit for a “qualifying child.” 26 U.S.C. §24(c)(1) defines a “qualifying child” as “a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 17.” Plaintiffs did not dispute that their daughter was seventeen years old during the two tax years in question.

ued guidance with mandatory language to be included in notices that employers must provide to employees regarding available income tax credits.Employers cannot fulfill their notice obligations merely by linking to the CDOR Taxation Division’s information web page.The guidance, DR 0995, “Notice of Federal and State Refundable Tax Credits,” allows employers to fulfill their notice obligations by copying the language verbatim into a separate document or printing or scanning the CDOR’s provided document for distribution to employees on paper or electronically. Employees must receive all of the language in the notice from their employers. The guidance provides size and other specifications for print notices.Colorado House Bill (HB) 23-1006, signed into law on March 31, 2023, expanded annual tax withholding notice requirements to include written notice of the availability of federal and state earned income tax credits (26 U.S.C. § 32 and Colo. Rev. Stat § 39-22-123.5) and child tax credits (26 U.S.C. § 24 and Colo. Rev. Stat. § 39-22-129). This legislation provided that the written notice must be in English and in any other language that the employer typically uses to communicate with employees and must include any additional content that the CDOR may prescribe via rulemaking.The guidance also states that employers cannot fulfill their notice obligations by merely providing employees with a URL to the CDOR’s Child Tax Credit and Earned Income Tax Credit Information web page.

In addition to issuing annual statements showing the total compensation paid and income tax withheld for the preceding calendar year, Colorado employers are now required to notify employees in writing of the availability of income tax credits.On March 31, 2023, Lieutenant Governor Dianne Primavera, acting on behalf of Governor Jared Polis, signed into law House Bill (HB) 23-1006, which expanded the annual tax withholding notice requirements to include written notice of the availability of federal and state earned income tax credits (26 U.S.C. § 32 and Colo. Rev. Stat § 39-22-123.5) and child tax credits (26 U.S.C. § 24 and Colo. Rev. Stat. § 39-22-129). Employers may send the written notice to employees electronically, including via email or text message. The written notice must be in English and in any other language the employer uses to communicate with employees and must include any additional content that the Colorado Department of Revenue may prescribe via rulemaking.

However, this “knowledge” issue in addition to the “exigent circumstance” language indicates the IRS’s temporary guidance is not an impenetrable shield for taxpayers. I.R.C. § 24(a)-(b).See generally I.R.C. § 7527A.See I.R.C. § 6331(e); Rev. Rul. 55-210. IRS SB/SE Memorandum, Deviation for Levy Actions Involving Advance Payment of Child Tax Credit (CTC), Control Number: SBSE-05-0721-0038 (July 13, 2021).

The PATH Act permanently sets the threshold amount at an unindexed $3,000. See IRC § 24, as amended by PATH Act § 101.American Opportunity Tax CreditThe PATH Act makes permanent the American Opportunity Tax Credit (AOTC), which takes the permanent provisions of the Hope Scholarship Credit and increases the credit to $2,500 for various tuition and related expenses for four years of post-secondary education, and increases the beginning of the phase-out amounts to $80,000 (single) and $160,000 (married filing jointly).