What is the Colorado Pension and Annuity Subtraction?
What is the Colorado Pension and Annuity Subtraction?
Pension and Annuity Subtraction
You might be eligible to subtract the income you earned from a pension or annuity. We recommend that you read publication FYI Income 25 if this applies to you.
This subtraction is allowed only for pension or annuity income that is included in your federal taxable income. The amount of subtraction you can claim is also limited based upon your age.
As of December 31, 2021, if you were:
• Age 65 or older, then you are entitled to subtract $24,000 or the total amount of your taxable pension/annuity income, whichever is smaller; or
• At least 55 years old, but not yet 65, then you are entitled to subtract $20,000 or the total amount of your taxable pension/annuity income, whichever is smaller; or
• Younger than 55 years old and you received pension/annuity income as a secondary beneficiary (widow, dependent child, etc.) due to the death of the person who earned the pension/annuity, then you are entitled to subtract $20,000 or the total amount of your secondary beneficiary taxable pension/annuity income, whichever is smaller.
If this applies to you, please list the Social Security number of the deceased in the space provided.
Pension/annuity income should not be intermingled between spouses. Each spouse must meet the requirements for the subtraction separately and claim the subtraction only on their pension/annuity income. Any qualifying spouse pension/annuity income should be reported on line 4.
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