Colorado Income-Qualified Senior Housing Income Tax Credit
Understand a specific Colorado tax credit offering financial relief to seniors in designated low-income housing, a benefit distinct from the PTC Rebate.
The Colorado senior income tax credit provides a financial benefit to a specific group of older adults and is designed to help offset living costs. This state-level tax credit is claimed on the state income tax return. It was authorized for the 2022 and 2024 tax years but was not available for the 2023 tax year.
This credit is distinct from other state programs, such as the more widely known Property Tax/Rent/Heat (PTC) Rebate. While both programs aim to assist seniors, they have different eligibility rules and benefit structures.
Eligibility Requirements for the Credit
To qualify for this tax credit, an individual must meet several criteria. The first requirement is age; the person must be 65 years of age or older by the last day of the tax year for which they are filing. The claimant must also have been a full-year or part-year Colorado resident for the tax year.
Income is another determining factor. The full credit of $1,000 is available for those with a federal adjusted gross income (AGI) of $25,000 or less. The credit amount is reduced for individuals with an AGI between $25,000 and $75,000, and no credit is available for an AGI of $75,000 or more.
A claimant is not eligible for this credit if they have already claimed the Colorado Senior Property Tax Exemption, also known as the Senior Homestead Exemption, for the same tax year.
Calculating the Credit Amount
The credit amount is not based on the amount of rent or property tax paid. This credit is refundable, which is a feature for low-income individuals. A refundable credit means that if the amount of the credit is more than the income tax owed by the claimant, the state will pay the difference as a refund. For instance, if a senior has a tax liability of $50 and qualifies for a $1,000 credit, they will receive a refund of $950.
Information and Documents Needed to Claim the Credit
Before filing a tax return to claim the credit, it is important to gather the necessary information and documents. You will need documents to verify your income, such as statements reporting income received throughout the year. Common examples are the Social Security Administration’s Form SSA-1099, which details Social Security benefits, and Form 1099-R for pension or retirement plan distributions.
You will also need the specific Colorado tax forms to make the claim. The credit is reported on the main Colorado Individual Income Tax Return (Form DR 0104), and the calculation is performed on the Credit Schedules for Individuals (Form DR 0104CR).
How to Claim the Credit on Your Tax Return
The process of claiming the credit on your tax return involves a few steps. The first action is to complete the Credit Schedule, Form DR 0104CR. On this form, you will navigate to the section for the senior income tax credit and enter the information required to calculate your credit based on your adjusted gross income.
After calculating the credit amount on the DR 0104CR, the next step is to transfer this figure to your main state tax return, Form DR 0104. You will enter the calculated credit amount on the designated line, which will then be used to reduce your total tax liability.
The final step is to submit the completed tax return to the Colorado Department of Revenue. The recommended method is to e-file using one of the state’s approved tax software products, which can guide you through the process and often leads to faster processing. Alternatively, you can mail a paper return.
Use the correct address for mailing:
- For a return with a refund, mail to: Colorado Department of Revenue, Denver, CO 80261-0005
- For a return with a payment, mail to: Colorado Department of Revenue, Denver, CO 80261-0006