Income Tax Subtractions
These subtractions will change your Colorado Taxable Income from the amount of Federal Taxable Income. See instructions in the income tax booklet and the subtraction forms for additional guidance on completing the form/schedule. Do not enter negative amounts. To ensure faster processing of your paper return, the amount entered in the Subtractions line of the income tax return must exactly match the subtotal amount at the end of the substractions schedule or form.
Save time and file online! You may use the Department's free e-file service Revenue Online to file your Colorado income tax return. You do not need to login to Revenue Online to File a Return. After you file, you have the option of setting up a Login ID and Password to view your income tax account in Revenue Online. Or, you may opt to e-file through a paid tax professional or purchase tax software to complete and file returns. You may submit your documentation as an E-Filer Attachment via Revenue Online, as well.
If filing by paper, visit the Credits & Subtractions Forms page to download the form(s) and/or schedule(s) needed to file for the subtractions listed below. Be sure to use the form for the same tax year for which you are filing. For example, if you are filing a return for 2018, you must include the credit form(s) for 2018 with your return.
- Agricultural Asset Lease Deduction
- Enter the certificate number (YY-###) for the deduction certificate that was provided by the Colorado Agricultural Development Authority (CADA). If you received more than one certificate, then you must file electronically. Enter the amount of the deduction on this line. The amount of deduction allowed to a qualified taxpayer may not exceed $25,000. You must submit a copy of each certificate with your return.
- Catastrophic Health Insurance
- Charitable Contributions
- Colorado Source Capital Gain
- Exonerated Persons Deduction
- For tax years 2013 and thereafter, certain exonerated persons (or the immediate family members of an exonerated person) who are found to be actually innocent may deduct from their individual income tax return any compensation received pursuant to §13-65-103, C.R.S. that was received on or after January 1, 2014. However, attorney fees that are awarded as part of the compensation shall not be deducted. [§39-22-104(4)(q), C.R.S.] The deduction shall be subtracted from the individual income tax return on the line designated. Write “Exonerated Persons Income” as the explanation for the deduction.
- First-time Home Buyer Savings Account Interest Deduction
- Marijuana Business Deduction
- To claim this deduction, Colorado-licensed marijuana businesses must list any expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed by section 280E of the Internal Revenue Code because marijuana is a controlled substance under federal law.
- Medical Savings Account
- Olympic Gold Medal
- Military Servicemembers & Their Families
- Active Duty Servicemembers: Reacquisition of Residence During Active Military Service (formerly the Military Income Tax Exemption)
- Retired Service Members: Military Retirement Subtraction
- Military Family Relief Fund Grants Deduction: For tax years 2014 and thereafter, military families receiving a grant from the Military Family Relief Fund may deduct the amount of the grant from their individual income tax return to the extent that it is included in federal taxable income. [§39-22-104(4)(p), C.R.S.] The deduction shall be subtracted from the individual income tax return. Write “Military Family Relief Fund Grant” as the explanation for the deduction where designated. If you deducted the income on your federal return rather than claiming the grant (you did not include it in federal taxable income), no Colorado subtraction is allowed since the income is not included in your federal taxable income.
- Nonresident Disaster Relief Worker Subtraction
- Pension Annuity
- Railroad Pension
- Reservation Income
- List any amount of income that was derived wholly from reservation sources by a recognized tribal member, which was included as taxable income on the federal income tax form. Submit proof of tribal membership, residence, and source of income. This must be submitted only every three years by taxpayers claiming this subtraction.
- State Income Tax Refund
- Tuition Program Contribution/Distribution
- United States Government Interest
- Wildfire Mitigation Measures
- Enter the amount of qualified expenses incurred in performing wildfire mitigation on your land, up to $2,500. Reference FYI Income 65 for information on how to accurately calculate this subtraction.