First-time Home Buyer Savings Account Interest Deduction

You may deduct the amount of taxable interest and/or earnings on a qualified First-time Home Buyer Savings Account in the tax year claimed. A “first-time home buyer savings account” is an account with a financial institution designated as such in accordance with section 39-22-4704(1) § 39-22-4703(6), C.R.S. You must complete the form DR 0350 and submit the form with your return if you designate a First-time Home Buyer Savings Account in order to claim this subtraction. Colorado requires you to submit this form annually  with the Department when filing your income taxes once you have designated a First-time Home Buyer Savings Account, even if you are not claiming a subtraction for that tax year.  Also, you must submit account statements and/or a 1099 showing the taxable interest and/or earnings on the account in the tax year a subtraction is claimed. Upon withdrawal from the First-time Home Buyer Savings Account, you must also submit a real estate settlement statement that shows that the withdrawal was used for an eligible expense. Eligible expenses are down payments or closing costs that are included on the settlement statement (including, but not limited to, appraisal fees, mortgage origination fees, and inspection fees.) Please see the form DR 0350 for additional requirement information on how to claim the subtraction.