In Colorado, a retired servicemember under the age of 55 can claim the military retirement subtraction up to a maximum of $15,000 (for tax years 2022 through 2028).
Retired servicemembers aged 55 and over, as well as taxpayers of any age who receive a death benefit or annuity, can claim the regular pension and annuity subtraction. The amount of the allowable exclusion is based on the taxpayer's age as follows:
- Taxpayers who qualify and are under the age of 65 as of the last day of the tax year can subtract the lesser of $20,000 or the taxable pension and annuity income included in their federal taxable income.
- Taxpayers over the age of 65 as of the last day of the tax year are allowed to subtract the lesser of $24,000 or taxable pension and annuity income included in their federal taxable income. Additionally, the amount of the pension exclusion is coordinated with the social security benefits exclusion. See the instructions for how much is allowable in a return that includes both pension and annuity income and social security benefits.
In the Colorado resident individual tax return, TaxSlayer ProWeb automatically subtracts the allowable portion of pension income based on the ages of the taxpayer and spouse. Otherwise, to adjust the subtraction, from the Colorado Return menu select:
- Subtractions from Income
- Pension/Annuity Income
Additional Information:
Colorado Retired Servicemembers
Income Tax Topics: Military Servicemembers
While TaxSlayer Pro strives to make the information and links contained on this page as timely and accurate as possible, TaxSlayer Pro makes no promise or guarantee about the timeliness, accuracy or completeness of the contents of this page. The information contained on this page is for general information and is not intended to be tax advice. The user is also encouraged to review the underlying state resources and publications.