Colorado DR 104AD

Out of Scope by [line number]:
  • (7) Charitable contribution that are Out of Scope for Schedule A.
  • (12) Colorado Marijuana Business Expense Subtraction

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Useful documents:

TaxSlayer entry: State Section

[1] State Income Tax Refund (FYI Income 12):

The taxable portion of the Colorado refund from Form 1040 line 10.

[2] U.S. Government Interest (FYI Income 20):

Automatically filled in as specified in TaxSlayer interest and dividend forms.

[3,4] Pension subtraction (FYI Income 25):

TaxSlayer calculates and enters this amount.

  • $24,000 of annuities and pensions for each person is non-taxablefor 65 and over or
  • $20,000  for each person is non-taxable for ages 55-64 or
  • $20,000 for each beneficiary of any age (such as a widowed spouse or orphan child) who are receiving a pension or annuity because of the death of the person who earned the annuity or pension. ☣ SOFTWARE ERROR – the CO form requires entry of the SSN of the deceased but TaxSlayer provides no way to input it. In this case, manually enter it and paper file the return.
  • Conversion of a traditional IRA to a ROTH IRA can also be included in this subtraction.
  • Also included are taxable Social Security benefits, but see FYI Income 18 for how to calculate the amounts for each person.
  • Nonqualified deferred compensation payments received by persons 55 years of age or older qualify for the pension subtraction even if such payments may be reported as wages for federal income tax purposes to the extent they qualify as retirement income.
    • ☣ SOFTWARE ERROR – If there is an entry in box 11 of a W-2, it should, but does not, properly carry across to the CO pension exclusion lines 3(TP) or 4(SP).
    • ☣ SOFTWARE ERROR – If the box 7 code of a 1099-R is a “1” with an exception or “2” (known exception) and if the taxpayer is 55 or older, the amount does not properly carry across to the CO pension exclusion lines 3(TP) or 4(SP).
    • If the exclusion amount is already at the $20,000/$24,000 limit, there is no need to fix the problem.
    • To fix the software error, find the Pension Exclusion Worksheet (immediately following the CO 104) and manually add the amount to the Allowed Pension Exclusion (up to the $20,000/$24,000 limit). Then, enter in the State Section > Subtrations from Income > Other Subtractions Tax Slayer page for the affected taxpayer’s exempt pension line.

[5] Colorado Source Capital Gain Subtraction (FYI income 15):

  • Taxable capital gains from the sale of real or tangible personal property located in Colorado.
  • Acquired after May 8, 1994 but before June 4, 2009 and owned continuously for five years prior to the sale date.

[6] College tuition contribution (CollegeInvest, 529 plan) (FYI Income 44):

  • The amount claimed can be no more than the Federal taxed income.
  • Contributions to other states are not eligible.
  • There is an option that permits a refund to be applied to a 529 plan. See instructions on the College Invest site.

[7] Charitable contribution deduction (FYI Income 48):

Always enter in Schedule A forms

  • If not itemizing using Schedule A, total contributions (minus $500) can be deducted on the Colorado 104 – enter on the A Details worksheet.
  • It is possible that by paying slightly more federal tax (by not itemizing) and less CO tax that the overall tax payment will be smaller, so try both ways.
  • Any single non-cash contribution greater than $500 claimed on the CO return must have an appraisal or 1098C (for vehicles) scanned or sent in. (See the Colorado 104CR resource page for more information on how).

[8] Qualified Reservation Income:

  • Income derived wholly from reservation sources by a recognized tribal member and included as taxable income.
  • Tribal membership proof, residence and source of income must be submitted every 3 years.

[9] PERA or DPSRS Subtraction (FYI Income 16):

  • If contributions were made between 7/1/1984 – 12/31/1986 (PERA) or any time in 1986 (DPSRS), a subtraction may be taken.
  • The taxpayer will have to provide you the records to show what was contributed and what has already been subtracted.

[10] Railroad Retirement Subtraction (FYI Income 25):

Tier I and Tier II Railroad retirement pensions are not taxable in the state of Colorado.

☣ SOFTWARE ERROR – Tier 1 (social security equivalent) is not distinguished from other social security amounts. Both Tier 1 and Tier 2 amounts are included in the 20K/24K pension exclusion and should not be. This produces erroneous results for the CO state return. Correct this using the RRB Worksheet.

  • If there is a federal taxable amount for the RR pensions, that amount is subtracted from state income.
  • If there is other pension income, the full $20,000/$24,000 still applies to that pension source.

[11] Wildfire Mitigation Measures Subtraction(FYI Income 65):

  • Must be the owner of the property
  • Allows the lesser of: 50% of expenses, $2500, or owner’s Federal taxable income.

[12] Colorado Marijuana Business Deduction

[ts_oos][/ta_oos] due to complexity with Federal return

[13] Non-Resident Disaster Relief Worker Subtrations

Return of CO tax withheld while doing disaster relief work in CO. Not available to a CO resident.

[14] Active Duty Military Colorado HOME Subtraction (new in 2016)

This subtraction is only allowed to military servicepersons who meet several requirements. In order to qualify for the subtraction the serviceperson must:

  1. have Colorado as his or her home of record,
  2. after enlisting in the military, have acquired legal residency in a state other than Colorado and,
  3. on or after January 1, 2016, have reacquired Colorado residency.

A military serviceperson who meets these three requirements can claim a subtraction for any compensation included in his or her federal taxable income that he or she received for active duty service after reacquiring Colorado residency.

[15] Agricultural Asset Lease Deduction (new in 2017)

Requires a CADA certificate, to be attached to the return.

[16] First Time Home Buyer Savings Account Deduction (new in 2017)

A deduction for the amount of taxable interest and/or earnings on a qualified account in the tax year claimed. Requires completion of Colorado form DR 0350 with the tax return.

  • Account size is limited to $150,000.
  • Total interest deduction is limited to $14K (single) or $28K (joint) – no annual limitation.