Retirement Pension or Annuity Subtraction

Qualifications

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 (such as a widowed spouse or orphan child) who are receiving a pension or annuity because of the death of the person who earned the pension

Subtraction Amount

  • Qualified 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.

For more information, review the FYI Income 25 guidance publication.