List of Income Tax Subtractions in Alphabetical Order
Colorado allows a variety of income tax subtractions. Information about each of these subtractions can be found below. For information about allowable income tax subtractions, please visit the Income Tax Credits page.
An income tax subtraction is allowed to a farmer for qualifying capital gains recognized from the sale of agricultural real property in Colorado and included in their federal taxable income. Qualifying capital gains must meet certain requirements, including requirements relating to the acquisition date for the property and possibly the location of the property either within or outside of Colorado.
Applicable tax years: 1996 and later
Required forms: DR 1316 and DR 0104AD
Required documentation: Most recent property tax statement for the property sold, federal Schedule F, and either federal Schedule D or Form 4797
Additional guidance: Income Tax Topics: Colorado Capital Gain Subtraction
Statutory citation: Section 39-22-518, C.R.S.
An income tax subtraction is allowed to an individual, estate, or trust for payments or contributions they made during the tax year to a college savings plan with CollegeInvest. The subtraction is subject to certain per-beneficiary limits.
Applicable tax years: 2001 and later
Required forms: DR 0104AD or DR 0105
Additional guidance: Income Tax Topics: 529 Contribution Subtraction
Statutory citation: Section 39-22-104(4)(i)(II), C.R.S.
An income tax subtraction is allowed to an individual, estate, or trust for an amount equal to all payments or contributions they made during the tax year to an Achieving a Better Life Experience (ABLE) program account administered by Colorado ABLE. Limitations apply to the amount that may be subtracted for contributions made with respect to each beneficiary.
Applicable tax years: 2023 through 2030
Required forms: DR 0104AD or DR 0105
Additional guidance: Income Tax Topics: ABLE Contribution Subtraction
Statutory citation: Section 39-22-104(4)(i)(II), C.R.S
A Colorado net operating loss deduction is allowed to a C corporation for any Colorado net operating loss carried forward from a prior year. A Colorado net operating loss is the portion of a federal net operating loss that is allocated to Colorado in the tax year that the loss is sustained. The net operating loss deduction is subject to applicable limitations under both state and federal law.
Applicable tax years: 1964 and later
Required forms: DR 0112
Additional guidance: Colorado Corporate Income Tax Guide - Part 8
Statutory citation: Sections 39-22-304(3)(g) and 39-22-504,C.R.S.
An income tax subtraction is allowed to a taxpayer licensed under the Colorado Marijuana Code in an amount equal to 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.
Applicable tax years: 2014 and later
Required forms: DR 0104AD, DR 0105, DR 0106, or DR 0112
Required documentation: Pro forma and actual federal schedule(s) calculating the subtraction and license number from the Colorado Marijuana Enforcement Division
Statutory citation: Section 39-22-104(4)(r) and 39-22-304(3)(m), C.R.S.
An income tax subtraction is allowed to a taxpayer licensed under the Colorado Natural Medicine Code in an amount equal to 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 natural medicine is a controlled substance under federal law.
Applicable tax years: 2024 and later
Required forms: DR 0104AD, DR 0105, DR 0106, or DR 0112
Required documentation: Pro forma and actual federal schedule(s) calculating the subtraction and license number from the Colorado Natural Medicine Division
Statutory citation: Section 39-22-104(4)(r.5) and 39-22-304(3)(m.5), C.R.S.
An income tax subtraction is allowed to a C corporation filing a combined return including a controlled foreign corporation that is a C corporation incorporated in a foreign jurisdiction for the purpose of tax avoidance pursuant to section 39-22-303(8)(b)(II), C.R.S. The subtraction is allowed for any amount included in federal taxable income pursuant to section 951(a) of the Internal Revenue Code with respect to the controlled foreign corporation. The subtraction is also allowed for any amount in federal taxable income pursuant to section 951A(a) of the Internal Revenue Code with respect to the controlled foreign corporation, less any amount deducted under section 250 (a)(1)(B) of the Internal Revenue Code with respect to such income.
Applicable tax years: 2022 and later
Required forms: DR 0112
Additional guidance: Income Tax Topics: Section 303(8)(b) Entities
Statutory citation: Section 39-22-304(3)(q), C.R.S.
An income tax subtraction was allowed to an individual for tax years 2024 through 2026 for contributions made by their employer to their home savings account. The subtraction was allowed only for employer contributions that were included in the individual’s federal taxable income. Individuals could not claim the subtraction for contributions they made to their own home savings account.
Applicable tax years: 2024 through 2026
Required forms: DR 0104AD
Additional guidance: Income Tax Topics: Employer Contributions to Home Savings Accounts
Statutory citation: Section 39-22-104(4)(bb), C.R.S.
An income tax subtraction is allowed to an individual for any amount received as an employer matching contribution to the individual’s adult learner’s individual trust account or savings account with CollegeInvest, to the extent such amount is included in the individual’s federal taxable income.
Applicable tax years: 2011 and later
Required forms: DR 0104AD
Additional guidance: Individual Income Tax Guide - Part 4
Statutory citation: Section 39-22-104(4)(o), C.R.S.
An income tax subtraction is allowed to an individual who is an exonerated person for any amount received as compensation pursuant to section 13-65-103, C.R.S., to the extent such compensation is included in the individual’s federal taxable income. No subtraction is allowed for any portions of the judgment awarded as attorney’s fees.
Applicable tax years: 2013 and later
Required forms: DR 0104AD
Statutory citation: Section 39-22-104(4)(q), C.R.S.
An income tax subtraction is allowed to an individual for any Family and Medical Leave Insurance (FAMLI) benefits included in their federal taxable income. The subtraction is allowed both for FAMLI benefits paid by the Division of Family Medical Leave Insurance and for benefits paid by a private plan approved under section 8-13.3-521, C.R.S.
Applicable tax years: 2024 and later
Required forms: DR 0104AD
Statutory citation: Section 8-13.3-517(2), C.R.S.
An income tax subtraction is allowed for death benefits received by the surviving spouse, family member, or designee of any first responder that died because of injuries or an occupational disease sustained while performing their job. The subtraction is allowed only to the extent that the death benefits are included in federal taxable income. The amount of the death benefit is generally excluded from federal taxable income under section 101(h) of the Internal Revenue Code.
Applicable tax years: 2026 and later
Required forms: DR 0104AD
Required documentation:
Additional guidance:
Statutory citation:
An income tax subtraction was allowed for tax years commencing prior to January 1, 2025, to an individual for any interest and other income earned on money invested in a qualifying first-time home buyer savings account, to the extent such income was included in the individual’s federal taxable income. The account had to comply with the requirements of Article 47 of Title 39, C.R.S.
Applicable tax years: 2017 through 2024
Required forms: DR 0350 and DR 0104AD
Additional guidance: Income Tax Topics: First-Time Home Buyer Savings Account Subtraction
Statutory citation: Section 39-22-104(4)(w), C.R.S.
In the apportionment and allocation of a C corporation’s income, a portion of the C corporation’s foreign source income is excluded, depending on whether the C corporation claimed a federal deduction or a federal tax credit for foreign taxes paid or accrued.
Applicable tax years: 1986 and later
Required forms: DR 0112
Additional guidance: Colorado Corporate Income Tax Guide - Part 7
Statutory citation: Section 39-22-303(10), C.R.S.
An income tax subtraction is allowed to a partner in a partnership that qualifies as an export taxpayer. For the purposes of the subtraction, a partnership qualifies as an “export taxpayer” if 50% or more of the products it produces in Colorado are sold outside of Colorado. If the gross receipts of the partnership are derived from the performance of services, 50% or more of the gross receipts for services performed in Colorado by a partner or employee of the partnership must be sold or provided to persons outside of Colorado. The subtraction is allowed for the partner’s distributive share of the partnership income or gain which constitutes foreign source income for federal income tax purposes.
Applicable tax years: 1994 and later
Required forms: DR 0104AD
Statutory citation: Section 39-22-206, C.R.S.
An income tax subtraction was allowed for the taxpayer’s income tax year beginning on or after January 1, 2021, but before January 1, 2022, to a taxpayer that made certain required additions relating to the federal CARES Act on an income tax return for a prior tax year. The amount of the subtraction that a taxpayer could claim was limited, but any excess amount of the subtraction could be carried forward and claimed in subsequent tax years, subject to applicable limitations.
Applicable tax years: 2021 and later
Required forms: DR 0104AD
Statutory citation: Sections 39-22-104(4)(z) and 39-22-304(3)(p), C.R.S.
An income tax subtraction is allowed to an individual for any amount they receive as a grant from the Military Family Relief Fund, to the extent that the amount is included in their federal taxable income.
Applicable tax years: 2014 and later
Required forms: DR 0104AD
Additional guidance: Income Tax Topics: Military Servicemembers
Statutory citation: Section 39-22-104(4)(p), C.R.S.
An income tax subtraction is allowed to retired military servicemembers under 55 years of age for military retirement benefits included in their federal taxable income. The allowable subtraction is limited to $15,000.
Applicable tax years: 2019 through 2028
Required forms: DR 0104AD
Additional guidance: Income Tax Topics: Military Servicemembers and Income Tax Topics: Social Security, Pensions, and Annuities
Statutory citation: Section 39-22-104(4)(y), C.R.S.
An income tax subtraction is allowed to an individual who wins a medal while competing for the United States of America in either the Olympic Games or the Paralympic Games, so long as the individual’s adjusted gross income for the tax year does not exceed $1 million ($500,000 if married filing separately). The subtraction is allowed for the value of any medal won while competing for the U.S. at either the Olympic Games or the Paralympic Games, regardless of whether or not the medal’s monetary value is included in federal taxable income, and any monetary award given for winning the medal by the U.S. Olympic Committee or any sport-specific national governing body or Paralympic sport organization that is included in the individual’s federal taxable income. The subtraction is not allowed for prize money awarded by the U.S. Olympic Committee to medal winners that is excluded from federal taxable income on the winner’s federal income tax return or for any endorsement income or nonmonetary benefits.
Applicable tax years: 2018 and later
Required forms: DR 0104AD
Statutory citation: Section 39-22-104(4)(x), C.R.S.
An income tax subtraction is allowed to individuals age 55 or older for pension and annuity income included in their federal taxable income. The subtraction is also allowed to individuals under age 55 whose federal taxable income includes pension and annuity income they received because of the death of the person originally entitled to receive the pension or annuity. The subtraction is generally limited to $24,000 for individuals age 65 or older and limited to $20,000 for all other individuals. These limits do not apply to the subtraction of Social Security benefits received by individuals age 65 or older during tax years 2022 and later. The limits also do not apply to the subtraction of Social Security benefits received during tax years 2025 and later by individuals age 55 to 64 whose adjusted gross income is $75,000 or less if filing single or $95,000 or less if filing jointly.
Applicable tax years: 1975 and later
Required forms: DR 0104AD
Additional guidance: Income Tax Topics: Social Security, Pensions, and Annuities
Statutory citation: Section 39-22-104(4)(f), C.R.S.
Under certain circumstances, a portion of pension income paid by the Colorado Public Employees Retirement Association (PERA) or the Denver Public Schools Retirement System (DPSRS) and included in a taxpayer’s federal taxable income may qualify for subtraction. Most PERA and DPSRS retirement benefits will not qualify for this subtraction. Current state employees cannot claim a subtraction for PERA contributions they made during the current tax year.
Applicable tax years: 1987 and later
Required forms: DR 0104AD
Additional guidance: Income Tax Topics: Social Security, Pensions, and Annuities
Statutory citation: Section 39-22-104(4)(c), C.R.S.
An income tax subtraction is allowed to an enrolled tribal member who lives on a reservation. The subtraction is allowed for qualified reservation income derived wholly from reservation sources and included in the tribal member’s federal taxable income.
Required forms: DR 0104AD
Required documentation: Proof of tribal membership, residence, and source of income must be submitted once every three years the subtraction is claimed.
An income tax subtraction is allowed to individuals for railroad retirement benefits included in their federal taxable income. Qualifying income includes tier I benefits,
tier II benefits, vested dual benefits, supplemental annuity benefits, and railroad disability benefits.
Applicable tax years: All tax years
Required forms: DR 0104AD
Required documentation: RRB-1099 and RRB-1099R Statements
Additional guidance: Income Tax Topics: Social Security, Pensions, and Annuities
Statutory citation: 45 U.S.C. § 231m
An income tax subtraction is allowed to an individual in active duty military service whose home of record is Colorado, whose state of legal residence on or after January 1, 2016, is a state other than Colorado, and who reacquired legal residence in Colorado pursuant to section 39-22-110.5, C.R.S. The subtraction is allowed for any compensation received for active duty service in the armed forces of the United States, to the extent that the compensation is included in the individual’s federal taxable income.
Applicable tax years: 2016 and later
Required forms: DR 0104AD
Required documentation: A military form showing Colorado home of record, evidence of acquiring residency in another state, and evidence of reacquiring residency in Colorado.
Additional guidance: Income Tax Topics: Military Servicemembers
Statutory citation: Section 39-22-104(4)(u), C.R.S.
An income tax subtraction is allowed to a C corporation for any amount treated as a section 78 dividend under section 78 of the Internal Revenue Code that is included in a C corporation’s federal taxable income. Section 78 requires any C corporation that claims a federal foreign tax credit for taxes deemed paid on its behalf pursuant to section 960 to include in its federal taxable income as a dividend an amount equal to such taxes deemed to be paid. No subtraction is allowed for any amount treated as a dividend pursuant to section 78 of the Internal Revenue Code that is attributable to global intangible low-taxed income (GILTI) or net CFC tested income (NCTI) and deducted, pursuant to section 250(a)(1)(B)(ii) of the Internal Revenue Code, in the calculation of federal taxable income.
Applicable tax years: 1977 and later
Required forms: DR 0112
Statutory citation: Section 39-22-304(3)(j), C.R.S.
An income tax subtraction is allowed to an individual for the amount of any Segal AmeriCorps Education Award included in their federal taxable income. Segal AmeriCorps Education Awards are awarded to AmeriCorps alumni and may be used to pay educational expenses or repay student loans.
Applicable tax years: 2026 through 2033
Required forms: DR 0104AD
Required documentation: IRS Form 1099-MISC showing the award
Statutory citation: Section 39-22-104(4)(cc)
An income tax subtraction is allowed to an individual, estate, or trust for the amount of any state income tax refunds, credits, or offsets included in their federal taxable income. An individual is generally required to report a state income tax refund on their federal return only if they claimed itemized deduction for the tax year in which the state income tax was paid. A subtraction is allowed to C corporations for the amount of any refund or credit for the overpayment of Colorado income taxes that is included in its federal taxable income. The subtraction is not allowed for refunds of Colorado severance taxes or income taxes imposed on a C corporation by any other state.
Applicable tax years: 1964 and later
Required forms: DR 0104AD, DR 0105, or DR 0112
Statutory citation: Sections 39-22-104(4)(e) and -304(3)(f), C.R.S.
Colorado and federal law exempt from state taxation interest income on obligations of the U.S. government. Federal law further exempts from state taxation interest income on obligations of some, but not all, U.S. government owned enterprises. Taxpayers may claim a subtraction on their Colorado income tax return for any exempt income included in their federal taxable income.
Applicable tax years: All
Required forms: DR 0104AD, DR 0105, or DR 0112
Additional guidance: Income Tax Topics: U.S. Government Interest
Statutory citation: Sections 39-22-104(4)(a), -304(3)(a), and -304(3)(b), C.R.S.
An income tax subtraction is allowed to corporations for any portion of wages or salaries paid or incurred by the corporation for the tax year, but which are not deductible in the calculation of federal taxable income due to section 280C of the Internal Revenue Code. Section 280C disallows or reduces the deduction for wages or salaries for which a corporation claims certain federal credits. No subtraction is allowed for any federal deduction disallowed because a corporation claimed a credit for employer social security and Medicare taxes paid on certain employee tips.
Applicable tax years: 1978 through 2026
Required forms: DR 0112
Additional guidance: Colorado Corporate Income Tax Guide - Part 8
Statutory citation: Section 39-22-304(3)(i), C.R.S.
An income tax subtraction was allowed to individuals, estates, and trusts for costs they incurred during the tax year in performing wildfire mitigation measures on property they own within Colorado. The subtraction was allowed for either 50% or 100% of the costs incurred for wildfire mitigation measures, depending on the tax year, and was limited to $2,500.
Applicable tax years: 2009 through 2024
Required forms: DR 0104AD
Required documentation: Copies of receipts documenting expenses
Additional guidance: Income Tax Topics: Wildfire Mitigations Measures
Statutory citation: Section 39-22-104(4)(n) and (4)(n.5), C.R.S.
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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.
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 subtractions schedule or form.