Colorado tax exemption amount for military retired pay for age over 55

Forum|Forum|3 months ago
April 14, 2026
1 reply
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State taxes portion deducts 20,000 from my retired military pay. I'm over age 55, shouldn't it be $24,000.

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RogerD1

Level 6

The $20,000 deduction is correct for ages 55 to 64.

Per the Colorado Retired Military website: "Retired Servicemembers Age 55 or Older

If a retired servicemember is at least 55 years old at the end of the tax year, they may claim the regular pension and annuity subtraction on the Subtractions from Income Schedule (DR 0104AD) for military retirement benefits included in their federal taxable income."

The explanation of the deduction amount appears in Colorado DR104 Instructions on page 19 as follows:

"The amount of subtraction you can claim is also limited based upon your age. As of December 31, 2025, 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"

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