This story by Lindsey Toomer appeared on Colorado Newsline on January 9, 2024.
Coloradans don’t have to worry about paying taxes on their Taxpayer’s Bill of Rights refunds this year.
A spokesperson for Democratic U.S. Sen. Michael Bennet said he confirmed in a meeting with Gov. Jared Polis and Internal Revenue Service leadership Tuesday that TABOR refunds will not be taxed this filing season.
New IRS guidance released in August left the possibility for TABOR refunds to be considered taxable income for the 2023 tax year, and it’s still possible the IRS will tax the refunds in the future.
Shelby Wieman, a spokesperson for Polis, said the confirmation that TABOR refunds paid to Coloradans in 2023 won’t count as taxable income for the 2024 filing season means taxpayers don’t need to report the refunds when they file their taxes ahead of April 15.
Polis and other Colorado officials argued against the possibility of taxing the refunds last year, which they said would have reversed nearly 30 years of precedent in how the IRS treats Colorado’s refund mechanism. Colorado voters approved the TABOR amendment, which mandated the refunds alongside a variety of other anti-tax measures, in 1992.
Coloradans filing their taxes this year can expect an $800 TABOR refund from the state, though the dollar amount is expected to decrease over the next few years.