Colorado Pension and Annuity Income Exclusion?

[kathryn16-kk]

Is there a Pension and Annuity Income Exclusion in Colorado?

[JohnW152]

Yes, there is.  It's referred to as a subtraction on your Colorado return.

You may be eligible to subtract income that you receive from a pension or annuity. The subtraction is only allowed only for pension or annuity income that you've included in your federal taxable income.

The qualifications are somewhat long.  For details, refer to:

• Line 4, Pension and Annuity Subtraction in the DR 0104 Book, which can be found at 2023 Income Tax Forms | Individuals & Families and
• Income Tax Topics: Social Security, Pensions, and Annuities

To get to the relevant Colorado screen in TurboTax Online: 

1. Open TurboTax Online
2. Select  Tax Home in the left pane
3. On the  Hi, let's keep working on your taxes! screen, select the dropdown on the right side of the State Taxes box, then select Start, Continue, or Review/Edit
4. In the left pane, select Prepare State
5. Proceed through the screens until you come to the Status of your state returns screen
6. Select  Start, Continue or Edit to the right of Colorado.  If no state is shown, select + Add another state and add Colorado
7. Proceed through the state screens until you get to the Pension and Annuity Income page

You'll need to enter the portion of retirement income that qualifies for the exclusion.