A Bill for an Act
Page 1, Line 101Concerning the creation of an income tax credit allowed to
Page 1, Line 102veterans with a service-connected disability to offset
Page 1, Line 103the property tax paid on the veteran's primary
Page 1, Line 104residence.
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.)
For income tax years commencing on or after January 1, 2026, the bill allows a veteran who is honorably discharged, possesses a service-connected disability rating of at least 10%, and owns and occupies a primary residence in the state (eligible veteran) to claim a refundable income tax credit (tax credit) in an amount equal to a percentage, based on the eligible veteran's service-connected disability rating, of the amount of property tax that the eligible veteran paid on their primary residence during the income tax year.
To claim a tax credit, a taxpayer must apply to the county assessor for the county in which the taxpayer's primary residence is located and submit a decision letter from the U.S. department of veterans affairs that sets forth their service-connected disability rating. The county assessor is required to determine whether the taxpayer is an eligible veteran and if so, the amount of the income tax credit the eligible veteran may claim, based on the property tax paid by the eligible veteran and the eligible veteran's service-connected disability rating. The county assessor is required to issue a tax credit certificate to an eligible veteran in an amount equal to the amount of the tax credit that may be claimed.
Upon the death of an eligible veteran, the eligible veteran's surviving spouse or legal dependents are eligible to claim the tax credit until specified events have occurred.
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 39-22-571 as follows:
Page 2, Line 339-22-571. Tax credit for eligible veterans - property tax paid
Page 2, Line 4on primary residence - tax preference performance statement -
Page 2, Line 5legislative declaration - definitions. (1) (a) In accordance with
Page 2, Line 6section 39-21-304 (1), which requires each bill that creates a new
Page 2, Line 7tax expenditure to include a tax preference performance
Page 2, Line 8statement as part of a statutory legislative declaration, the
Page 2, Line 9general assembly finds and declares that the purpose of the tax
Page 2, Line 10credit provided in this section is to provide tax relief for certain
Page 2, Line 11individuals, specifically to honorably discharged veterans who
Page 2, Line 12have a service-connected disability rating of at least ten
Page 2, Line 13percent and who pay property taxes on a primary residence in
Page 2, Line 14the state, by allowing an income tax credit in an amount equal to a portion of the property tax paid on the primary residence.
Page 3, Line 1(b) The general assembly and the state auditor shall
Page 3, Line 2measure the effectiveness of the credit in achieving the purpose
Page 3, Line 3specified in subsection (1)(a) of this section based on the number and value of credits claimed.
Page 3, Line 4(2) As used in this section, unless the context otherwise requires:
Page 3, Line 5(a) "Disability rating" means the percentage assigned by
Page 3, Line 6the United States department of veterans affairs to indicate the degree of a veteran's service-connected disability.
Page 3, Line 7(b) "Eligible veteran" means a veteran who:
(I) Is honorably discharged;
Page 3, Line 8(II) Possesses a disability rating of at least ten percent; and
Page 3, Line 9(III) Owns and occupies a primary residence.
Page 3, Line 10(c) "Primary residence" means a property in the state that
Page 3, Line 11a veteran owns and occupies as their principal place of residence.
Page 3, Line 12(d) "Veteran" means a person who has served in the United States armed forces.
Page 3, Line 13(3) For any income tax year commencing on or after
Page 3, Line 14January 1, 2026, an eligible veteran is allowed an income tax
Page 3, Line 15credit against the tax imposed by this article 22 in an amount
Page 3, Line 16equal to a percentage, specified in subsection (4) of this section,
Page 3, Line 17of the amount that the eligible veteran paid in property tax on their primary residence during the income tax year.
Page 3, Line 18(4) The amount of the tax credit allowed to an eligible veteran pursuant to subsection (3) of this section is as follows:
Page 4, Line 1(a) For an eligible veteran with a disability rating of ten
Page 4, Line 2percent to nineteen percent, an amount equal to ten percent of the amount of property tax paid;
Page 4, Line 3(b) For an eligible veteran with a disability rating of
Page 4, Line 4twenty percent to twenty-nine percent, an amount equal to twenty percent of the amount of property tax paid;
Page 4, Line 5(c) For an eligible veteran with a disability rating of
Page 4, Line 6thirty percent to thirty-nine percent, an amount equal to thirty percent of the amount of property tax paid;
Page 4, Line 7(d) For an eligible veteran with a disability rating of
Page 4, Line 8forty percent to forty-nine percent, an amount equal to forty percent of the amount of property tax paid;
Page 4, Line 9(e) For an eligible veteran with a disability rating of fifty
Page 4, Line 10percent to fifty-nine percent, an amount equal to fifty percent of the amount of property tax paid;
Page 4, Line 11(f) For an eligible veteran with a disability rating of sixty
Page 4, Line 12percent to sixty-nine percent, an amount equal to sixty percent of the amount of property tax paid;
Page 4, Line 13(g) For an eligible veteran with a disability rating of
Page 4, Line 14seventy percent to seventy-nine percent, an amount equal to seventy percent of the amount of property tax paid;
Page 4, Line 15(h) For an eligible veteran with a disability rating of
Page 4, Line 16eighty percent to eighty-nine percent, an amount equal to eighty percent of the amount of property tax paid;
Page 4, Line 17(i) For an eligible veteran with a disability rating of
Page 4, Line 18ninety percent to ninety-nine percent, an amount equal to ninety percent of the amount of property tax paid; and
Page 5, Line 1(j) For an eligible veteran with a disability rating of one
Page 5, Line 2hundred percent, an amount equal to one hundred percent of the amount of property tax paid.
Page 5, Line 3(5) (a) (I) To claim a tax credit pursuant to this section, a
Page 5, Line 4taxpayer must submit an application for a tax credit certificate
Page 5, Line 5to the county assessor for the county in which the taxpayer's
Page 5, Line 6primary residence is located. A taxpayer must submit an
Page 5, Line 7application for a tax credit certificate on or before September
Page 5, Line 81 of the year for which the taxpayer intends to claim the tax credit.
Page 5, Line 9(II) With an application submitted pursuant to subsection
Page 5, Line 10(5)(a)(I) of this section, a taxpayer must submit a decision letter
Page 5, Line 11from the United States department of veterans affairs that sets forth the taxpayer's disability rating.
Page 5, Line 12(b) The division of property taxation in the department of
Page 5, Line 13local affairs, in consultation with the department of military
Page 5, Line 14and veterans affairs, shall develop and provide to each county
Page 5, Line 15assessor the application to be used by a taxpayer to apply for a
Page 5, Line 16tax credit certificate pursuant to subsection (5)(a) of this
Page 5, Line 17section and shall include any necessary instructions for a
Page 5, Line 18county assessor in their review of an application pursuant to subsection (5)(c) of this section.
Page 5, Line 19(c) The county assessor shall review a taxpayer's
Page 5, Line 20application submitted pursuant to subsection (5)(a) of this section to determine:
Page 5, Line 21(I) Whether the taxpayer is an eligible veteran; and
Page 6, Line 1(II) If the taxpayer is an eligible veteran, the amount of
Page 6, Line 2the credit that the eligible veteran may claim for the applicable
Page 6, Line 3income tax year based on the amount of property tax paid by the
Page 6, Line 4eligible veteran on their primary residence in the applicable property tax year and on the eligible veteran's disability rating.
Page 6, Line 5(d) Upon approving an eligible veteran's application and
Page 6, Line 6making the determinations described in subsection (5)(c) of this
Page 6, Line 7section, the applicable county assessor shall issue a tax credit
Page 6, Line 8certificate to the eligible veteran in an amount equal to the
Page 6, Line 9amount determined by the county assessor pursuant to subsection (5)(c)(II) of this section.
Page 6, Line 10(e) Each county assessor shall, in a sufficiently timely
Page 6, Line 11manner to allow the department to process returns claiming
Page 6, Line 12the tax credit allowed in this section, provide the department
Page 6, Line 13with an electronic report for the preceding tax year that lists
Page 6, Line 14each eligible veteran to which the county assessor issued a tax credit certificate and includes the following information:
Page 6, Line 15(I) The eligible veteran's name;
Page 6, Line 16(II) The amount of the income tax credit that the
Page 6, Line 17certificate indicates the eligible veteran is eligible to claim; and
Page 6, Line 18(III) The eligible veteran's social security number or
Page 6, Line 19Colorado account number and federal employer identification number.
Page 6, Line 20(6) To claim the credit authorized by this section, an
Page 6, Line 21eligible veteran shall file the tax credit certificate issued by
Page 6, Line 22the county assessor pursuant to subsection (5) of this section with the eligible veteran's state income tax return.
Page 7, Line 1(7) Upon the death of an eligible veteran, the eligible
Page 7, Line 2veteran's surviving spouse or legal dependents are eligible to
Page 7, Line 3claim the income tax credit allowed in this section at the
Page 7, Line 4percentage specified in subsection (4) of this section last claimed by the eligible veteran, until:
Page 7, Line 5(a) The death of the surviving spouse or legal dependents;
Page 7, Line 6(b) The primary residence that is the basis of the income tax credit is sold or transferred; or
Page 7, Line 7(c) The surviving spouse or legal dependants of the
Page 7, Line 8eligible veteran no longer occupy the residence that is the basis of the income tax credit as their primary residence.
Page 7, Line 9(8) If the amount of the tax credit allowed pursuant to
Page 7, Line 10this section exceeds the amount of income taxes otherwise due
Page 7, Line 11on the income of the eligible veteran in the income tax year for
Page 7, Line 12which the credit is being claimed, the amount of the credit not
Page 7, Line 13used as an offset against income taxes in the income tax year is refunded to the eligible veteran.
Page 7, Line 14(9) Notwithstanding section 39-21-304 (4), the credit allowed by this section continues indefinitely.
Page 7, Line 15SECTION 2. Act subject to petition - effective date. This act
Page 7, Line 16takes effect at 12:01 a.m. on the day following the expiration of the
Page 7, Line 17ninety-day period after final adjournment of the general assembly; except
Page 7, Line 18that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 7, Line 19of the state constitution against this act or an item, section, or part of this
Page 7, Line 20act within such period, then the act, item, section, or part will not take
Page 7, Line 21effect unless approved by the people at the general election to be held in
Page 8, Line 1November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.