summary
Introduced
01/14/2026
01/14/2026
In Committee
01/14/2026
01/14/2026
Crossed Over
Passed
Dead
02/09/2026
02/09/2026
Introduced Session
2026 Regular Session
Bill Summary
Current law allows any individual to deduct amounts, up to certain caps based on the individual's age, received as pensions or annuities from any source, to the extent included in federal adjusted gross income. Notwithstanding the caps on the deduction for amounts received as pensions or annuities from other sources, current law allows any individual who is 65 years old or older at the close of a taxable year to subtract the total amount of social security benefits that the individual received from the individual's federal taxable income, to the extent those benefits were included in federal taxable income, when determining the individual's state taxable income. This subtraction is also allowed to any individual who is 55 years old or older and has an adjusted gross income for the applicable tax year that is less than or equal to $75,000 if filing individually or $95,000 if filing jointly. For income tax years commencing on or after January 1, 2027, the bill removes all caps on the deduction for amounts received as pensions and annuities and allows any individual who is 55 years old or older, regardless of income, to subtract the total amount that the individual received as pension or annuity income from the individual's federal taxable income, to the extent that income was included in federal taxable income, when determining the individual's state taxable income.
AI Summary
This bill, effective for tax years beginning on or after January 1, 2027, significantly expands the deduction for retirement benefits by removing all existing caps on the amounts individuals can subtract from their federal taxable income when calculating their state taxable income, provided these amounts are included in their federal adjusted gross income. Currently, there are age-based caps on pension and annuity deductions, and specific income limitations for those under 65 to deduct social security benefits. This legislation will allow any individual aged 55 or older, regardless of their income level, to deduct the full amount of their pension or annuity income, which includes distributions from retirement accounts like IRAs and self-employed retirement accounts, as well as social security benefits, disability payments, and death benefits, from their state taxable income. The bill also redefines "pensions and annuities" to encompass a broader range of retirement income and includes provisions for measuring the effectiveness of these tax expenditures.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
House Committee on Finance Postpone Indefinitely (on 02/09/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://leg.colorado.gov/bills/HB26-1062 |
| Fiscal Note FN1 | https://leg.colorado.gov/bill_files/111236/download |
| BillText | https://s3.us-west-2.amazonaws.com/beta.leg.colorado.gov/bfbbebc5a1fe2509462b08249c272f4c |
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