Colorado lawmakers to IRS: Please don’t tax TABOR

DENVER (KDVR) — All 10 lawmakers representing Colorado in Congress signed a letter to the Internal Revenue Service asking that TABOR refunds once again not be subject to federal income tax for the 2022-23 tax year.

According to the letter, the IRS has considered taxing the flat $800 and $1,600 payments Colorado taxpayers received in 2024 as if it were federal income. This has not happened once in the 32 years since voters ratified the Taxpayer’s Bill of Rights as a constitutional amendment in 1992.

“A change this significant would take considerable time and resources from the state to ensure regulatory stability and to appropriately inform the public of how these changes may affect them,” the letter said.

The letter went on to say that it would have a “significant impact” on Colorado taxpayers, especially those earning lower incomes.

“I appreciate … the Colorado delegation for their support in ensuring that Coloradans’ TABOR refunds are not taxed and keeping more money in the pocket of hardworking Coloradans,” Gov. Jared Polis also said. “I urge the federal government to maintain the decades of precedence that tax refunds are not taxed.”

Typically, TABOR refunds are calculated based on income. Taxpayers who make more are given larger refunds and those who make less are given smaller ones. However, the 2022-23 refund was a flat $800 for single filers and $1,600 for those filing jointly.

This came after the Colorado General Assembly passed a law to do just that.

This was also the case in 2022 when $750 and $1,500 checks were given out to taxpayers through the Colorado Cash Back program.

It is because of this temporary change from a tiered system to a flat-rate system that the IRS may consider it federal taxable income.

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