Related Information

Question: What is the pension/annuity subtraction?
Eligibility:

Colorado allows a pension/annuity subtraction for:
  • taxpayers who are at least 55 years of age as of the last day of the tax year;
  • beneficiaries of any age who are receiving a pension or annuity because of the death of the person who earned the pension (such as a widowed spouse or orphan child). This subtraction allows all or a portion of pension and annuity income taxable on the federal return to be exempt from Colorado tax.

  • Age Requirements:

    Taxpayers who are under age 65 as of the last day of the tax year can subtract the smaller of:
  • $20,000, or

  • the taxable pension/annuity income included in federal taxable income.

    Taxpayers who are 65 years of age or older as of the last day of the tax year can subtract the smaller of

  • $24,000, or

  • the taxable pension/annuity income included in federal taxable income.

    Qualified Benefits:

    To qualify for the subtraction, a payment must be:

  • pension or annuity income that is not considered a premature distribution, and

  • reported on the federal return as taxable IRA distributions, pension and annuities, or Social security benefits or reported as a lump sum distribution on the Colorado Form 104.

    For Further Information:
    FYI Income 25
    FYI Income 18
    FYI Income 16

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