SB17-075 - Income Tax Deduction For Military Retirement Benefits

Postponed Indefinitely
Concerning a state income tax deduction for military retirement benefits.

The starting point for determining state income tax liability is federal taxable income. This number is adjusted for additions and subtractions (deductions) that are used to determine Colorado taxable income, which amount is multiplied by the state's 4.63% income tax rate. Currently, a person who is 55-64 years old may deduct up to $20,000 of retirement benefits from federal taxable income, and a person who is 65 years old or older may deduct up to $24,000. These limits apply to retirement benefits from all sources, including those related to service in the military.

The bill creates an additional deduction under which a person of any age may deduct a percentage of military retirement benefits from his or her state income tax. In 2018, the percentage is equal to 10%, and it increases by 10% each year thereafter until all military retirement benefits are exempt. All other retirement benefits and military retirement benefits in excess of the limit for the new deduction continue to be deductible under the existing deduction, subject to the existing limits on ages and amounts.

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Latest update: April 26, 2017
04/26/2017 - House Committee on Finance Refer Amended to Appropriations
04/17/2017 - Introduced In House - Assigned to Finance + Appropriations
04/12/2017 - Senate Third Reading Passed - No Amendments
04/11/2017 - Senate Second Reading Passed with Amendments - Committee
04/10/2017 - Senate Second Reading Laid Over Daily with Amendments - Committee
04/06/2017 - Senate Committee on Appropriations Refer Amended to Senate Committee of the Whole
01/24/2017 - Senate Committee on Finance Refer Unamended to Appropriations
01/13/2017 - Introduced In Senate - Assigned to Finance