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Level 1
posted Feb 8, 2023 3:16:27 PM

Colorado Pension and Annuity Subtraction for premature IRA distribution

I am 57 yrs old (married, filing jointly) and live in Colorado. I took an early IRA (rollover IRA owned by me) distribution of $22,500 in 2022 to help pay part of my child's college expenses of $33,959. Can I take the $20,000 Colorado Pension and Annuity Subtraction?

0 2 409
2 Replies
Expert Alumni
Feb 8, 2023 3:33:09 PM

Since you are over 55 years old and under 65, you can take a $20,000 subtraction from pension distributions in 2022. You can learn more here:   Colorado pension exclusion

Level 1
Feb 8, 2023 3:56:38 PM

Thank you, ThomasM125!

TurboTax (self-employed desktop version), under Learn More pop-up said:

"Note: Premature distributions do not qualify for this subtraction." There was a link to more info (https://tax.colorado.gov/sites/tax/files/2020.02_Income25.pdf), which I read several times and appeared that it was allowable if the penalty exception was allowable under Federal rules. Thank you again.