Colorado 2023 $800 TABOR Refund

[slcdawg]

I'm helping my high school daughter with her taxes, for a part time job where she earned under $2500 and paid $96 in state taxes to Colorado.  TurboTax is giving her an $800 for Colorado Sales Tax Refund after answering the two questions:

1. Were you incarcerated in 2023? -  No

2. Will you file before 4/15/24? - Yes

I'm confused she would qualify for an $800 credit, as she started 2023 age 17.  According to TABOR | Department of Revenue - Taxation (colorado.gov) you're eligible if age 18 when 2023 begins.  

The Help feature in TurboTax says: If you are a full-year Colorado resident who was under 18 as of January 1, 2023, you may claim the state sales tax refund only if you have a Colorado tax liability (Form 104, line 14 must be greater than 0) or you are claiming a refund of Colorado wage withholding on a W-2. Your return must be postmarked by October 15, 2024.

Form 104, Line 14 is zero.  Why would she be eligible?  Is it because she didn't make enough and is claiming a refund for the $96 paid for CO State tax?

Basically, is this an error in TurboTax?  Or, is she eligible for the credit? 

2023 TABOR Refund

The Department of Revenue (DOR) is administering the following 2023 TABOR refund mechanism, primarily through the Colorado Individual Income Tax Return (DR 0104):

Sales Tax Refund - Eligible 2023 full-year residents may claim this refund by filing in the manner described below by the appropriate deadline. The refund is $800 for one qualifying taxpayer or $1,600 for two qualifying taxpayers filing jointly. 

• File a 2023 DR 0104 by April 15, 2024, if you: 
  • Were at least 18 years old when the tax year began, 
  • Do not have a Colorado income tax liability,
  • Are not claiming a refund of wage withholding, and
  • Are not otherwise required to file a Colorado return because you have no federal filing requirement.

[JohnW152]

Based on what you're describing, it sounds like your daughter is eligible for the credit.  You may be overlooking the second part of the requirements, bolded below:

Sales Tax Refund - Eligible 2023 full-year residents may claim this refund by filing in the manner described below by the appropriate deadline. The refund is $800 for one qualifying taxpayer or $1,600 for two qualifying taxpayers filing jointly. 

• File a 2023 DR 0104 by April 15, 2024, if you: 
  • Were at least 18 years old when the tax year began, 
  • Do not have a Colorado income tax liability,
  • Are not claiming a refund of wage withholding, and
  • Are not otherwise required to file a Colorado return because you have no federal filing requirement.
• File a 2023 DR 0104 by October 15, 2024, if you: 
  • Have a Colorado income tax liability,
  • Claim a refund of wage withholding, or
  • Are required to file a Colorado return because you are required to file a federal return.

The requirements for the credit described in the first bullet don't apply to a taxpayer who was under age 18 when tax year 2023 began.  But the requirements in the second bullet do.  So, if your daughter was under 18 when the tax year began and otherwise qualifies under the second bullet, she gets the credit. 

The language of this second bullet has confused many taxpayers, and will hopefully be addressed before the next filing year. If this response doesn't address what you're asking, feel free to re-post. 

See Line 34, State Sales Tax Refund in the Form DR 0104 Booklet and 2023 TABOR Refund in the Colorado Department of Revenue's Taxpayer's Bill of Rights (TABOR) Information for more information.

[slcdawg]

Thank you for the response.  I think I understand.  Prior to the section on the Sales Tax refund, she was getting a refund for the state taxes withheld (presumably because her income was below the threshold).  So, she would be doing the following:

• Claim a refund of wage withholding, or

[slcdawg]

Should I be concerned that she only paid $96 in state income tax, but is getting a $800 credit?  

[AmyC]

In reviewing the 2023  Taxpayer's Bill of Rights (TABOR) Information, I see that anyone 18 and over qualifies with no liability, no withholding, no filing requirement. While anyone younger may claim it if they have a tax liability or wage withholding since they are a taxpayer.

She paid taxes and qualifies for the credit. TABOR requires excess revenue to be refunded to taxpayers. She is one. She didn't pay much, but she paid. I think dinner should be on her 🙂

[slcdawg]

Thank you.  Hard to get my head around it - going to get a healthy refund and agree, dinner on her. 🙂