Colorado does tax retirement income, however a hefty exclusion is given for retirement and pension income.
Here is the link to the Colorado retirement exclusion:
Since you have to put your Social Security, Retirement and Pension income in the Federal return, you can go ahead and add Colorado. The figures will automatically flow over to the state return. See how the exclusions work out for you. You can either delete the state or choose not to file your state.
You do not have to pay for Colorado until you decide to file.
In the 2021 TurboTax program for Colorado, there is a problem. The state allows $24000 exclusion from your income for each filer over 65. However, you can only exclude what you actually earn in retirement income or with Social Security. I have tried multiple times to fill in the amounts for the exclusion to only what we can claim, even though the program asks for all that you earned. No matter, the program indicates that I get the total $48,000 exclusion. Pushing the edit button does nothing. I cannot file my taxes with this program as it would be Wrong. Please be aware of this. I find it very frustrating that this is the only way to report this very serious problem
@mtbr The actual ruling allows for you to deduct the smaller of $24,000 or your entire retirement income. If your entire retirement income is greater than $24,000 - as it seems to be in your case - then the full $24,000 deduction applies.
Thank you for your reply. I can deduct the $24000 because I earn more than than. However, my husband does not make $24000. I entered what he can exclude but the program keeps giving him the $24000 exclusion. It seems to not understand this rule and take it that you can exclude this amount whether you have earned this much or not.
Since we can't see your return in this forum, one user was able to get the correct amounts for the Colorado Pension Exclusion by going back through the guided interview again.
Click this link for more info on Colorado Pension Exclusion.
You could also delete your state and re-do it if the above does not resolve your issue.
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