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Returning Member
posted Mar 1, 2022 6:23:51 PM

Colorado State Tax question-Pension & Annuity Subtraction

Colorado State allows a partial subtraction for pension and annuity income. I took a distribution from my 401k. Would that qualify for the subtraction?

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3 Replies
Expert Alumni
Mar 1, 2022 8:32:16 PM

401(k) withdrawals do qualify for Colorado pension and annuity subtraction, unless it is a premature distribution from a self-employed retirement account plan such as a solo 401(k). Premature distributions from an employer plan will qualify.

 

All normal 401(k) distributions will qualify.

 

See Colo. Code Regs. 39-22-104(4)(f)

Returning Member
Mar 2, 2022 7:59:34 PM

Thank you for your response, but I wanted to clarify my question to be sure.  I am 61 years old and I have not retired  from my job yet.  In 2021 I took a withdrawal from my employer 401k plan.  Does that still qualify me for the Pension & Annuity Substraction on my Colorado State tax return. 

Level 15
Mar 3, 2022 5:58:26 AM

Yes, the distribution qualifies for the subtraction on your Colorado return.