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Colorado pension exclusion

Forum|Forum|2 years ago
March 11, 2024
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Colorado tax instructions say the pension and annuity exclusion is limited to $24,000 per individual. However, TT appears to be excluded our entire pension payments which are far higher. Which approach is accurate?

Best answer by JamesG1

Does your Colorado DR 0104AD Subtractions from Income Schedule show a higher figure than $24,000?

Colorado 2023 Instructions for DR 0104, page 12, states:

Line 4 Pension and Annuity Subtraction

The amount of subtraction you can claim is also limited based upon your age.

As of December 31, 2023, if you were:

Age 65 or older, then you may subtract $24,000 minus any amount entered on line 3, or the total amount of your taxable pension/annuity income, whichever is smaller; if the amount in line 3 of this form is greater than $24,000, you may not claim any subtraction for pension and annuity income on line 4; or

At least 55 years old, but not yet 65, then you may subtract $20,000 minus any amount entered on line 3, or the total amount of your taxable pension/ annuity income, whichever is smaller; if the amount on line 3 of this form is $20,000, you may not claim any subtraction for pension and annuity income on line 4; or

Younger than 55 years old and you received pension/annuity income as a secondary beneficiary (widow, dependent child, etc.) due to the death of the person who earned the pension/ annuity, then you may subtract $20,000 minus any amount entered on line 3, or the total amount of your secondary beneficiary taxable pension/ annuity income, whichever is smaller; if the amount on line 3 of this form is $20,000, you may not claim any subtraction for pension and annuity income on line 4. Pension

J

JamesG1Answer

Does your Colorado DR 0104AD Subtractions from Income Schedule show a higher figure than $24,000?

Colorado 2023 Instructions for DR 0104, page 12, states:

Line 4 Pension and Annuity Subtraction

The amount of subtraction you can claim is also limited based upon your age.

As of December 31, 2023, if you were:

Age 65 or older, then you may subtract $24,000 minus any amount entered on line 3, or the total amount of your taxable pension/annuity income, whichever is smaller; if the amount in line 3 of this form is greater than $24,000, you may not claim any subtraction for pension and annuity income on line 4; or

At least 55 years old, but not yet 65, then you may subtract $20,000 minus any amount entered on line 3, or the total amount of your taxable pension/ annuity income, whichever is smaller; if the amount on line 3 of this form is $20,000, you may not claim any subtraction for pension and annuity income on line 4; or

Younger than 55 years old and you received pension/annuity income as a secondary beneficiary (widow, dependent child, etc.) due to the death of the person who earned the pension/ annuity, then you may subtract $20,000 minus any amount entered on line 3, or the total amount of your secondary beneficiary taxable pension/ annuity income, whichever is smaller; if the amount on line 3 of this form is $20,000, you may not claim any subtraction for pension and annuity income on line 4. Pension

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K

kathy1000

What about for a NON resident? Do I get to exclude the entire pension amount because I'm an Arizona resident and only have to file in Colorado because I own a rental property there. However, my pension goes to me in Arizona......and also shows on my AZ tax return.

C

cocataxpayerAuthor

Sorry. I don't know anything about non-residents and pension exclusion.

C

cocataxpayerAuthor

Thanks. The CO 104AD shows the proper amount of $24,000 for each of us. TT's topic page on Pension and Annuity Income, CO exclusion, is confusing, with the full amount of our pensions appearing twice, the second time after saying "Enter the portion that qualifies for ... exclusion." I was confused.