What is a Conservation Easement?
A conservation easement is a voluntary legal agreement to restrict use of a property. Typically, development is limited or prohibited in order to forever protect and preserve conservation values, such as natural habitat, open space scenic views and agriculture, and outdoor recreation and education. For more information visit the DORA - Division of Conservation website.
About This Credit
The Gross Conservation Easement (GCE) tax credit (§ 39-22-522, C.R.S.) is an income tax credit available for the donation of a conservation easement in Colorado. This credit must be reported on your income tax return on the appropriate parts of the DR 1305 form series. Prior to claiming this credit on your tax return, the following requirements must be completed with the Division of Conservation, according to the year of the easement donation.
| Year of Easement Donation | Requirements with Division of Conservation |
|---|---|
| 2011-2013 | Certification of Total Amount |
| 2014-2020 | Review and Certification of Total Amount |
| 2021 or later | Review and Certification of Total Amount and Any Transfers |
2021 Legislative Changes
House Bill 21-1233 made several changes for tax credits from conservation easements donated on or after January 1, 2021, including:
- Allowing the credit to additional taxpayers or qualified entities;
- Increasing the percentage of the donation for calculating the credit; and
- Requiring tax credit certificates for transferees. The Department of Revenue and the Division of Conservation have prepared a summary of the new process for verifying credit transfers. For the Division of Conservation’s application forms and further information about their requirements, please visit the Division of Conservation website.
If you receive a new tax credit certificate from the Division of Conservation, please submit a copy with the earliest tax return on which you claim it.
Conditional Refundability
Pursuant to section 39-22-522(5)(b), C.R.S., donors of a conservation easement may elect to claim a partial refund of this tax credit for certain tax years. The Department will update the status of the current tax year in November or December after the determination is final.
- Tax year 2017: Non-refundable
- Tax year 2018: Partial refund allowed
- Tax year 2019: Partial refund allowed
- Tax year 2020: Non-refundable
- Tax year 2021: Partial refund allowed
- Tax year 2022: Partial refund allowed
- Tax year 2023: Partial refund allowed
For tax years ending on or after June 30, 2021, the $50,000 aggregate limit on credit use from a donation when a partial refund of the credit is claimed no longer includes amounts used by transferees.