Individual Income Tax | Information for Retirees

Retirement Pension or Annuity Subtraction

Qualifications

Colorado allows a pension/annuity subtraction for:

  • Taxpayers who are at least 55 years of age as of the last day of the tax year
  • Beneficiaries of any age (such as a widowed spouse or orphan child) who are receiving a pension or annuity because of the death of the person who earned the pension
Subtraction Amounts
  • Qualified taxpayers who are under age 65 as of the last day of the tax year can subtract the smaller of $20,000 or the taxable pension/annuity income included in federal taxable income.
  • Taxpayers who are 65 years of age or older as of the last day of the tax year can subtract the smaller of, $24,000 or the taxable pension/annuity income included in federal taxable income.

For more information, review the FYI Income 25 guidance publication.

Retired Military Servicemembers

A retired servicemember may claim one of two subtractions for all or part of the military retirement benefits that are included in their federal taxable income. The subtraction that may be claimed depends on the retired servicemember's age at the end of the tax year. For more information on these subtractions, visit the Retired Servicemembers web page and review guidance publication FYI Income 21.

Retired Railroad Employees

Federal law exempts railroad retirement benefits from state income taxes. The railroad retirement benefits subtraction is allowed on the Subtractions from Income Schedule (DR 0104AD) for any railroad retirement benefits reported on Form RRB-1099 or Form RRB-1099-R and included in a taxpayer’s federal taxable income. For more information, review FYI Income 25.