Colorado tax deductions and write-offs (2026)

Partly. Taxpayers 65 and older can subtract all federally taxable Social Security. Those aged 55 to 64 can subtract all of it if AGI is $75,000 or less (single) or $95,000 or less (joint); otherwise their subtraction is capped at $20,000. The $20,000 cap for ages 55-64 is shared with pension and annuity income. Under age 55 there is generally no Social Security subtraction, except for beneficiaries receiving benefits because of a death. The 55-64 full subtraction took effect in tax year 2025 (HB24-1142) and applies in 2026.

Partly. Retirees under age 55 can subtract up to $15,000 of military retirement pay (tax years 2022 through 2028). At age 55 to 64 they use the general pension subtraction of up to $20,000, which rises to $24,000 at age 65. The general pension subtraction is also available under age 55 for pension income received as a death benefit, which can cover survivor annuities. Other retirement income: Taxpayers 55–64 may subtract up to $20,000 and those 65+ up to $24,000 per person of pension, annuity, and IRA/401(k) income (the same cap also covers taxable Social Security).

Partly. Taxpayers 55–64 may subtract up to $20,000 and those 65+ up to $24,000 per person of pension, annuity, and IRA/401(k) income (the same cap also covers taxable Social Security). Amounts per Colorado DOR guidance;.

Yes: Colorado offers the Colorado Earned Income Tax Credit, 25% of the federal EITC for 2026 (down from 50% for 2023–2025) (refundable). ITIN filers eligible (via form DR 0104TN). Workers without children under 25 also eligible: generally ages 19–24, age 24 if a specified student, 18–24 for former foster or homeless youth. Full-year and part-year residents only. Revenue triggers set the rate, and the 2026 forecast did not trigger the higher rate.

Only instead of income tax: itemizers in Colorado pick sales tax (2.9% state rate, about 7.89% with local taxes) or state income tax, whichever is bigger. Lowest nonzero state rate in the U.S.; groceries are exempt from the state tax, but cities and counties (including self-collecting home-rule cities) may choose to tax food.

Yes on your federal return if you itemize, within the $40,400 SALT cap. Colorado adds its own break: PTC Rebate up to $1,178 (2025) for property tax, rent, or heat; 65+ or surviving spouse 58+, income under $19,094 single.

Yes: Colorado offers the Property Tax/Rent/Heat (PTC) Rebate. Rebate of up to $1,178 (2025) for low-income older Coloradans to help with rent, property tax, or heating costs, claimed on Form DR 0104PTC. Age 65+ or surviving spouse 58+; full-year Colorado resident; total income under $19,094 single or $25,788 married (2025); cannot be claimed as a dependent.

Partly: Colorado's Specific Ownership Tax (SOT) is based on your vehicle's value, so it's deductible as personal property tax if you itemize. SOT is a percentage of 85% of original MSRP, falling from 2.1% in year 1 to 0.45% in years 5-9, then $3 from year 10.

Colorado has a flat income tax of 4.4% (sometimes temporarily lower) and lets retirees subtract a large share of pensions and Social Security.

Yes on your Colorado return: $26,200 single / $39,200 joint per beneficiary. Only contributions to the state's own plan count. Caps indexed yearly to CO college costs; no deduction for K-12 contributions; recaptured on nonqualified withdrawals or out-of-state rollovers.

Yes: Colorado Child Tax Credit, per child under 6 (2025 figures): $1,200 if AGI is $26,000 or less ($36,000 joint); $600 up to $51,000 ($61,000 joint); $200 up to $77,000 ($87,000 joint); nothing above that. Refundable. Income thresholds are inflation-indexed.

Yes, as a business expense: Colorado charges $50 (online only) to form an LLC; ongoing: $25 Periodic Report, annual. Due annually around the formation anniversary month; $50 late penalty if filed after the due window.