Colorado Taxpayers To Each Receive $400 TABOR Refund

Updated Monday, May 9th, 2022

This summer, nearly all Colorado taxpayers can expect a $400 check in the mail. Gov. Jared Polis announced on Monday that over 3 Million Coloradans would receive a $400 “Colorado Dividend,” a special tax refund mandated by the Colorado Taxpayer Bill of Rights (TABOR). This is not an additional refund, just an advance on your normal TABOR refund.

The Colorado State Capitol in Denver, CO.

“The proposal,” says Polis, “will give refunds of $400 per person (single filers), $800 per joint filer this summer, (arriving in) late August to early September.” The TABOR payments will be sent to all full-time Colorado residents, as long as their 2021 state income tax returns are filed by May 31st.

Polis’s move to send the checks out this summer is months ahead of the typical timeline for TABOR Colorado payments, helping ease the financial pain of the previous fiscal year.

“We know that this last year has been difficult,” says Polis. “Rising prices, gas at four dollars a gallon, groceries costing more. Rather than sit on this money, we know that $400 will help people now.”

The payments will be made to all CO taxpayers who file by June 30th, or Oct. 17th for those with an extension. Taxpayers with an extension should receive their checks at the start of 2023.

If you’re new to Colorado, this news may come as a surprise. Here’s a quick explanation of TABOR law in Colorado.

What is Colorado TABOR Law?

The Colorado Taxpayer Bill of Rights (TABOR) is an amendment to the Colorado State Constitution passed in 1992. TABOR limits the amount of revenue that the Colorado State government can spend and retain.

TABOR has played a major role in shaping the tax system in Colorado. It dictates that state and local governments cannot raise taxes without voter approval. And, if state revenues grow faster than the rates of inflation and population growth, the government must refund the excess revenue back to the taxpayers.

In effect, TABOR creates a revenue limit for the State of Colorado. Any amount of money collected over the limit is called the “TABOR Surplus,” and is sent back to citizens at the end of the fiscal year. Gov. Polis’s announcement is not a new piece of legislation. He is only sending out the TABOR payments already required by Colorado tax law ahead of schedule.

How Are TABOR Revenue Payments Taxed?

TABOR payments are not taxable. In fact, this year’s $400 checks are technically a tax refund for the year 2021 and should be put in the same category as the tax refund you would receive each year as a W-2 employee.

If you have any other questions about TABOR, Colorado tax rates, or need state or federal tax filing, give us a call (303) 317-6111 for a free consultation. Boxelder Consulting is a full service tax accounting, bookkeeping, and tax relief firm, and we would be happy to answer any questions you may have.

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About the Author

A company founder standing by Colorado's Front Range

Tom Conradt

Co-Founder, IRS Collections Defense Attorney

Tom Conradt is the co-founder of Boxelder Consulting & Tax Relief, and has been practicing IRS Collections defense law for the past ten years. Graduating from the University of North Carolina at Chapel Hill, Tom is the lead IRS Collections Defense Attorney and heads the tax resolution department. Tom’s favorite part about working at Boxelder Consulting is hearing about the relief that clients experience after they sign up and start seeing immediate results on their case. Tom enjoys all the outdoor activities Colorado has to offer, including skiing, hiking and climbing. He is also looking forward to the return of indoor pickup basketball.

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