deducting gambling losses in Colorado

[b78772]

I know gambling losses against winnings are entered on the Federal return.  On my federal I receive money back for taxes I already paid on the winnings.  The loss is then carried over to the Colorado return. 

But, Colorado is taxing me on my winnings without taking into account the losses.  Which means I do not receive any of the taxes taken our of the winnings for the state taxes.  In fact, I am taxed on the winnings and, therefore, I owe taxes on the winnings.  Even though my losses equaled my winnings.

[DMarkM1]

Likely you are seeing the results of CO "add backs".  CO starts with federal taxable income which means your itemized gambling losses (shown on line 16 on federal Schedule A) are already accounted for in your CO taxable income.  

However, since federal itemized deductions include CO state taxes paid, CO has an "add back" of those state taxes paid to CO taxable income. 

Further, if your income exceeds $300,000 your CO itemized/standard deduction is limited according your filing status (see below).  CO has an "add back" of deduction amounts that exceed the limits below.  

Single    $12,000 

Joint      $16,000

Here is the CO income tax instruction for reference.