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Individual Income Tax Letter Rulings


Private Letter Rulings & General Information Letters

Businesses and individuals can request a general information letter or private letter ruling on any tax administered by the department. General information letters are general discussions of tax issues that are not specifically addressed in other department publication, such as FYIs, rules and regulations, or form instructions. General Information Letters are general statements of department understanding and cannot be relied upon as binding guidance. Private letter rulings are specific determinations of the tax consequences of a proposed or completed transaction. Unlike general information letters, private letter rulings are binding on the department and, therefore, provide taxpayers with greater certainty for their business and personal taxes. However, private letter rulings can only be relied upon by the party to whom the ruling is issued. Private letter rulings cannot be relied upon by any taxpayer other than the taxpayer to whom the ruling is made. For more information about general information letters and private letter rulings including fee amounts and how to submit a request, please see department regulation 24-35-103.5.



Child Care Contribution Credit - Published June 11, 2024

A taxpayer who makes a monetary contribution to the requester, a child placement agency, is allowed to claim the child care contribution tax credit pursuant to section 39-22-121(1.5), C.R.S.


Residency of foreign students, interns, and trainees - Published March 21, 2024

Concerning the residency status of foreign students, interns, and trainees in Colorado on F-1, M-1, or J-1 visas.


Foreign Source Income Exclusion - Published September 20, 2023

The foreign source income exclusion authorized by section 39-22-303(10), C.R.S., is not
allowed to individuals. The foreign source income exclusion is allowed only to C corporations.


Child Care Contribution Credit - Published January 26, 2024

Regarding the child care contribution income tax credit, the letter discusses the disposition of credits earned in excess of the donor’s Colorado income tax liability.  The letter also discusses organizations that will provide child care but are not yet licensed.  Finally, the letter discusses mixed-use facilities.




Nonresident Trust

PLR-22-002, PLR-22-003, PLR-22-004

For purposes of determining the Colorado income tax imposed on the federal taxable income of a trust, a trust is a “nonresident trust” when the trustee is a Delaware corporation; the trustee’s agents, including the primary trust officer, handle the day-to-day administration of the trust from the trustee’s Delaware office; all of the trust's books, records, and accountings are held at the trustee’s Delaware office; all investments made with respect to the trust's direct holdings, if any, would be made by agents of the trustee at the trustee’s Delaware office; and the trust is administered in Delaware, not in Colorado.


Credit for Tax Paid to Other States 

A taxpayer may not claim the credit for income tax imposed for the amount of taxes on federal taxable income accrued to another state on income derived by a resident individual from sources in another state if an individual taxpayer becomes a Colorado resident in a tax year that is after the tax year when the tax accrued in the other state.


Sourcing nonresident partner’s distributive share of partnership income

This general information letter discusses the sourcing of a nonresident partner’s distributive share of ordinary business income, other items of partnership income, and the gain from the sale of a disregarded entity by the partnership.


Refund limitation for conservation easement credits from donations made by pass-through entities

This letter discusses the statutory limit for conservation easement tax credits in the event a refund is claimed for the credit and how that limit applies to a credit allowed for a donation made by a pass-through entity.


Apportionment of Income Arising from Restricted Stock Units

A nonresident's income from restricted stock units is sourced to Colorado based upon the number of work days in Colorado during the period the employee was required to work for the employer prior to the vesting date. 


Child Care Contribution Credit

Contributions made to a club that provides training and competition programs for young ski racers, in order to fund a project to expand the club's training environment, do not qualify for the child care contribution credit.


Child Care Contribution Credit

Contributions made to a club that provides training and competition programs for young ski racers, in order to fund a project to renovate the clubhouse, do not qualify for the child care contribution credit.


Child Care Contribution Credit

Subject to the requirements, conditions, and limitations set forth in this ruling, the Organization may issue a Child Care Contribution Tax Credit Certification (DR 1317) to Colorado taxpayers who purchase donated property or services at Organization’s charity fundraising auction event for the excess of the purchase price paid for an item over its fair market value.


Credit for Taxes Paid to Another State

Taxpayers are entitled to a credit for taxes paid to Ohio on income that Colorado sources to Ohio. Taxpayers determine the amount of income sourced to Ohio by using an average of the limited liability company’s apportionment ratios for the three tax years immediately preceding the tax year in which the husband’s interest in the limited liability company was sold.


Child Care Contribution Tax Credit Certification

Contributions made to a fund that awards grants to eligible nonprofit child care programs in Colorado to make capital improvements are eligible for the child care contribution credit despite the contribution not being made directly to the child care facility or program.


Interest, Dividend, and Capital Gain Distributions from Colorado and U.S. Obligations

If the dividend paid by the mutual fund is interest income from a United States obligation, the interest income can be subtracted from federal taxable income to the extent the income is included in federal taxable income. Colorado imposes tax on interest income from obligations of other states or their political subdivisions, but not on interest income derived from obligations of the State of Colorado and its political subdivisions.


Net Capital Gain from the Sale of Business Assets

Taxpayer, a limited liability company, and its members cannot subtract from Colorado taxable income net capital gain resulting from the sale of the Taxpayer’s goodwill because the sale did not qualify as a sale of a ownership interest.


S Corporation Colorado Source of Income

Subchapter S corporations are not subject to Colorado income tax. A Subchapter S corporation is not required to register an income tax account or withholding account with the Department. A Subchapter S shareholder may have an obligation to file an income tax return and pay Colorado income taxes if the person is a resident, or, if not a resident, the nonresident has any income from the sources described in §39-22-109. C.R.S.


Income Earned by Nonresident

Income derived from a tax lien certificate is sourced to Colorado because it is income from an ownership of an interest in real property in Colorado, and if the taxpayer purchases the lien for investment purposes, it is income derived from carrying on of a trade or business in Colorado and it is income derived from an intangible that is used in a trade or business in Colorado.

GIL-13-026Innovative Motor Vehicle Credit - Rescinded

Nonresident Directors Subject to State Income Tax

Nonresident corporate directors who attended two-day board of directors' meeting in Colorado incurred state income tax liability based on number of days performing duties in Colorado.