Colorado § 39-31-104.5 - Tax credit for assistance for individuals with a disability - tax preference performance statement - legislative declaration - definitions.

§ 39-31-104.5. Tax credit for assistance for individuals with a disability - tax preference performance statement - legislative declaration - definitions.

(1) (a) The general assembly finds and declares that in accordance with section 39-21-304, the tax expenditure created in this section is intended to reduce net taxes paid by certain individuals. Specifically, the tax expenditure is intended to provide assistance through an income tax credit for individuals with a disability who do not have income above a certain threshold amount.

(b) The general assembly and the state auditor shall measure the effectiveness of the tax expenditure in achieving the purpose specified in subsection (1)(a) of this section based on the number of taxpayers who have claimed the credit and the total amount of credits claimed.

(2) As used in this section, unless the context otherwise requires:

(a) "Credit" means the credit against income tax that is created in this section.

(b) "Inflation" means the annual percentage change in the United States department of labor, bureau of labor statistics, consumer price index for Denver-Aurora-Lakewood for all items and all urban consumers, or its successor index.

(c) (I) "Qualified individual" means a resident individual who has a disability during the entire income tax year to a degree sufficient to qualify for the payment to the individual of full benefits from any bona fide public or private plan or source based solely upon such disability.

(II) An individual has a disability for purposes of subsection (2)(c)(I) of this section if the individual is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted for a continuous period of not less than twelve months.

(3) For income tax years commencing on or after January 1, 2025, a qualified individual is allowed a credit against the tax imposed by article 22 of this title 39 in an amount set forth in subsection (4) of this section.

(4) (a) The credit may be claimed in an amount equal to:

(I) One thousand two hundred dollars for:

(A) A qualified individual filing a single return who has a federal adjusted gross income less than or equal to ten thousand dollars;

(B) Two qualified individuals filing a joint return with a federal adjusted gross income less than or equal to sixteen thousand dollars; or

(C) A qualified individual and a nonqualified individual filing a joint return with a federal adjusted gross income less than or equal to sixteen thousand dollars;

(II) One thousand dollars for:

(A) A qualified individual filing a single return who has a federal adjusted gross income greater than ten thousand dollars but less than or equal to twelve thousand five hundred dollars;

(B) Two qualified individuals filing a joint return with a federal adjusted gross income greater than sixteen thousand dollars but less than or equal to twenty thousand dollars; or

(C) A qualified individual and a nonqualified individual filing a joint return with a federal adjusted gross income greater than sixteen thousand dollars but less than or equal to twenty thousand dollars;

(III) Eight hundred dollars for:

(A) A qualified individual filing a single return who has a federal adjusted gross income greater than twelve thousand five hundred dollars but less than or equal to fifteen thousand dollars;

(B) Two qualified individuals filing a joint return with a federal adjusted gross income greater than twenty thousand dollars but less than or equal to twenty-four thousand dollars; or

(C) A qualified individual and a nonqualified individual filing a joint return with a federal adjusted gross income greater than twenty thousand dollars but less than or equal to twenty-four thousand dollars;

(IV) Six hundred dollars for:

(A) A qualified individual filing a single return who has a federal adjusted gross income greater than fifteen thousand dollars but less than or equal to seventeen thousand five hundred dollars;

(B) Two qualified individuals filing a joint return with a federal adjusted gross income greater than twenty-four thousand dollars but less than or equal to twenty-eight thousand dollars; or

(C) A qualified individual and a nonqualified individual filing a joint return with a federal adjusted gross income greater than twenty-four thousand dollars but less than or equal to twenty-eight thousand dollars; and

(V) Four hundred dollars for:

(A) A qualified individual filing a single return who has a federal adjusted gross income greater than seventeen thousand five hundred dollars but less than or equal to twenty thousand dollars;

(B) Two qualified individuals filing a joint return with a federal adjusted gross income greater than twenty-eight thousand dollars but less than or equal to thirty-two thousand dollars; or

(C) A qualified individual and a nonqualified individual filing a joint return with a federal adjusted gross income greater than twenty-eight thousand dollars but less than or equal to thirty-two thousand dollars.

(b) (I) A qualified individual who files a single return and has a federal adjusted gross income greater than twenty thousand dollars is not allowed a credit under this section.

(II) Two qualified individuals, or a qualified individual and a nonqualified individual, who file a joint return with a federal adjusted gross income greater than thirty-two thousand dollars are not allowed a credit under this section.

(c) (I) The department of revenue shall annually adjust for inflation the credit amounts set forth in subsection (4)(a) of this section if cumulative inflation since the last adjustment, when applied to the current credit amounts, results in an increase of at least ten dollars when the adjusted credit amounts are rounded to the nearest ten dollars.

(II) The department of revenue shall annually adjust for inflation the adjusted gross income amounts set forth in subsections (4)(a) and (4)(b) of this section if cumulative inflation since the last adjustment, when applied to the current adjusted gross income amounts, results in an increase of at least one hundred dollars when the adjusted gross income amounts, as adjusted, are rounded to the nearest one hundred dollars.

(5) If the credit exceeds the income taxes due on the qualified individual's income, the amount of the credit not used to offset income taxes is not carried forward and must be refunded to the qualified individual.

(6) A qualified individual who claims the credit cannot in the same tax year also claim the grant allowed pursuant to section 39-31-101.

(7) The credit received pursuant to this section is not treated as income for purposes of determining the eligibility of any individual for old age pension benefits under article 2 of title 26.

(8) Notwithstanding section 39-21-304 (4), the credit continues indefinitely.

(9) The credit allowed by this section is administered in the same manner as other credits against the tax imposed by article 22 of this title 39.

Source: L. 2024: Entire section added, (HB 24-1268), ch. 475, p. 3331, § 4, effective August 7.