A Bill for an Act
Page 1, Line 101Concerning an income tax credit for contributions to a
Page 1, Line 102health savings account.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill creates an income tax credit for a resident individual's contributions to a health savings account that supports a high deductible health plan, as defined pursuant to federal law (credit). The credit is an amount equal to 25% of the amount of the contribution, limited to:
- $500 for a single filer;
- $1,000 for joint filers; and
- $1,500 for contributions to a family health plan.
If the credit exceeds the income taxes due on the resident individual's income, the amount of the credit not used to offset income taxes is not carried forward as tax credits against the resident individual's subsequent years' income tax liability and is not refunded to the individual. The executive director of the department of revenue is required to adopt rules implementing the credit.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, add 39-22-131 as follows:
Page 2, Line 339-22-131. Tax credit for contributions to a health savings
Page 2, Line 4account - high deductible insurance plan - tax preference
Page 2, Line 5performance statement - legislative declaration - repeal. (1) (a) In
Page 2, Line 6accordance with section 39-21-304 (1), which requires each bill
Page 2, Line 7that creates a new tax expenditure to include a tax preference
Page 2, Line 8performance statement as part of a statutory legislative
Page 2, Line 9declaration, the general assembly finds and declares that the
Page 2, Line 10purpose of the tax expenditure created in subsection (2) of this
Page 2, Line 11section is to provide tax relief to certain individuals by
Page 2, Line 12providing a financial incentive for making contributions to health savings accounts.
Page 2, Line 13(b) The general assembly and the state auditor, in
Page 2, Line 14consultation with the department of revenue, shall measure the
Page 2, Line 15effectiveness of the credit allowed by this section by
Page 2, Line 16determining the increase in contributions to health savings accounts due to the credit.
Page 2, Line 17(2) Beginning January 1, 2026, a resident individual who
Page 2, Line 18contributes to a health savings account that supports a high
Page 2, Line 19deductible health insurance plan as defined in 26 U.S.C. sec. 223
Page 3, Line 1(c)(2), including a qualifying high deductible health insurance
Page 3, Line 2plan issued by an exchange established under the Colorado
Page 3, Line 3health benefit exchange created in article 22 of title 10, is
Page 3, Line 4allowed a credit against the income taxes due on the
Page 3, Line 5individual's income under this article 22 in accordance with this
Page 3, Line 6section. Subject to subsection (3) of this section, the credit is an
Page 3, Line 7amount equal to twenty-five percent of the amount contributed
Page 3, Line 8to the health savings account during the taxable year for which the credit is claimed.
Page 3, Line 9(3) The amount of the credit claimed pursuant to this section shall not exceed:
Page 3, Line 10(a) Five hundred dollars for a single filer;
(b) One thousand dollars for joint filers; and
Page 3, Line 11(c) One thousand five hundred dollars for contributions
Page 3, Line 12to a family health plan, whether the contribution is by a single filer or joint filers.
Page 3, Line 13(4) If the credit allowed under subsection (2) of this
Page 3, Line 14section exceeds the income taxes due on the resident individual's
Page 3, Line 15income, the amount of the credit not used to offset income taxes
Page 3, Line 16must not be carried forward as tax credits against the resident
Page 3, Line 17individual's subsequent years' income tax liability and must not be refunded to the individual.
Page 3, Line 18(5) The credit allowed pursuant to this section must be
Page 3, Line 19published in rules adopted by the executive director and must be
Page 3, Line 20included in income tax forms for the taxable year beginning January 1, 2026, and for subsequent tax years.
Page 3, Line 21(6) This section is repealed, effective December 31, 2030.
Page 4, Line 1SECTION 2. Act subject to petition - effective date. This act
Page 4, Line 2takes effect at 12:01 a.m. on the day following the expiration of the
Page 4, Line 3ninety-day period after final adjournment of the general assembly; except
Page 4, Line 4that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 4, Line 5of the state constitution against this act or an item, section, or part of this
Page 4, Line 6act within such period, then the act, item, section, or part will not take
Page 4, Line 7effect unless approved by the people at the general election to be held in
Page 4, Line 8November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.