House finance committee advances bill to remove Colorado EITC age cap for working seniors

A House Finance Committee advanced legislation that would remove Colorado's upper age limit for the state Earned Income Tax Credit, potentially allowing workers older than 65 to claim the credit when the bill's revenue triggers are met.

The sponsors said the bill aims to treat work the same at every age and to reduce senior poverty. A sponsor described the policy argument succinctly, saying "poverty is a policy choice" and urging the committee to extend the credit to older working Coloradans. Co-sponsor Representative Zokai told the committee the change would take effect in tax year 2028 and that the state credit is calculated as a percentage of the federal Earned Income Tax Credit (EITC), with a built-in revenue trigger (the estimated adjustment factor) that increases the credit only in years when the state's revenue growth meets specified thresholds.

Witnesses who testified in favor included Jay Reinig, an AARP volunteer legislative advocate, who said removing the age cap would prevent a tax increase triggered by a worker's 65th birthday and would put money into the pockets of modest-income seniors who are still working. Reinig said the additional income is likely to be spent quickly in local communities. Jeanette Hensley of the Colorado Center for Aging pointed to rising senior poverty rates and cited Census Bureau figures put at roughly 15% in 2024; she described the refund for an individual claimant as modest, noting a figure of about $324 as an illustrative example.

Committee members pressed sponsors on scope and fiscal risk. Representative Camacho asked why the bill does not extend credits to retired or disabled seniors who do not have earned income; sponsors said the proposal follows the federal definition of earned income and that expanding eligibility would have budget implications and could be considered through a different credit or a future amendment. Representative Gonzalez asked what would happen if the state faces a budget shortfall in 2028; sponsors replied that the bill's trigger mechanism would prevent the credit from "turning on" in deficit years. Representative Marshall expressed long-term fiscal concerns and skepticism about comparisons to states that have expanded their credits.

After closing remarks from the sponsors and brief additional committee comments, Representative Zokai moved the bill to the Committee on Appropriations with a favorable recommendation; Representative Garcia seconded. The committee polled and the motion passed 6 to 5.

The bill now goes to the House Appropriations Committee for further consideration.