summary
Introduced
02/17/2026
02/17/2026
In Committee
03/09/2026
03/09/2026
Crossed Over
Passed
Dead
Introduced Session
Potential new amendment
2026 Regular Session
Bill Summary
The bill adjusts 3 existing tax expenditures. ! Section 2 of the bill limits the alternative minimum tax credit to income tax years commencing prior to January 1, 2026; ! Section requires a corporation, for purposes of determining their state taxable income for state income tax years commencing on or after January 1, 2027, to add to their federal taxable income the amount, if any, that the taxpayer claimed as a deduction on the taxpayer's federal tax return pursuant to the employee remuneration deduction allowed pursuant to section 162 (m) of the internal revenue code; and ! Section 5 limits the period of time that net operating losses generated in income tax years commencing on or after January 1, 2027, can be carried forward from 20 years to 10 years and limits the amount of losses that may be claimed to 70% rather than 80%. Section 3 creates a new tax credit. The new tax credit allows taxpayers to claim a refundable tax credit, in addition to the child tax credit and the family affordability tax credit, in an amount determined by the amount and age of the taxpayer's children and the taxpayer's income. The total amount of the new tax credit is adjusted annually based on legislative council staff projections, such that the total amount of the new tax credit claimed in an income tax year is projected to be the same as the amount of revenue raised in sections 2, 4, and 5.
AI Summary
This bill makes several adjustments to Colorado's tax laws, primarily by limiting certain tax benefits and introducing a new tax credit. Specifically, it will limit the alternative minimum tax credit for individuals to tax years before January 1, 2026, and for corporations, it will require them to add back deductions for executive remuneration (compensation for top executives) to their federal taxable income when calculating state income tax for tax years beginning on or after January 1, 2027. Additionally, for corporations, the bill reduces the number of years net operating losses (losses from business operations that can be used to offset future profits) can be carried forward from 20 years to 10 years, and limits the amount of these losses that can be claimed each year from 80% to 70% for losses generated on or after January 1, 2027. In exchange for these changes, the bill creates a new, refundable tax credit for families, which will be available in addition to existing child and family affordability tax credits. The amount of this new credit will depend on the number and age of a taxpayer's children and their income, and it will be adjusted annually to ensure the total amount claimed is projected to equal the revenue generated by the other changes in the bill, aiming to offset the impact of recent federal tax law changes on family affordability programs.
Committee Categories
Budget and Finance
Sponsors (4)
Last Action
House Committee on Finance Refer Amended to Appropriations (on 03/09/2026)
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/HB26-1221 |
| House Finance Amendment L.003 | https://leg.colorado.gov/bill_amendments/18332/download |
| House Finance Amendment L.002 | https://leg.colorado.gov/bill_amendments/18333/download |
| Fiscal Note FN1 | https://leg.colorado.gov/bill_files/112921/download |
| BillText | https://leg.colorado.gov/bill_files/112093/download |
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