A Bill for an Act
Page 1, Line 101Concerning an income tax credit for a contribution 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.
The credit is available beginning January 1, 2027, through December 31, 2032.
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.
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
Page 2, Line 3follows:
Page 2, Line 439-22-131. Tax credit for contributions to a health savings
Page 2, Line 5account - high deductible insurance plan - tax preference
Page 2, Line 6performance statement - legislative declaration - repeal.
Page 2, Line 7(1) (a) In accordance with section 39-21-304 (1), which
Page 2, Line 8requires each bill that creates a new tax expenditure to include
Page 2, Line 9a tax preference performance statement as part of a statutory
Page 2, Line 10legislative declaration, the general assembly finds and
Page 2, Line 11declares that the purpose of the tax expenditure created in
Page 2, Line 12subsection (2) of this section is to provide tax relief to certain
Page 2, Line 13individuals by providing a financial incentive for making a
Page 2, Line 14contribution to a health savings account.
Page 2, Line 15(b) The general assembly and the state auditor, in
Page 2, Line 16consultation with the department of revenue, shall measure the
Page 2, Line 17effectiveness of the credit allowed by this section by
Page 2, Line 18determining the increase in contributions to health savings
Page 2, Line 19accounts due to the credit.
Page 2, Line 20(2) For income tax years commencing on or after January
Page 2, Line 211, 2027, but prior to January 1, 2033, a resident individual who
Page 3, Line 1contributes to a health savings account that supports a high
Page 3, Line 2deductible health insurance plan as defined in 26 U.S.C. sec. 223
Page 3, Line 3(c)(2), including a qualifying high deductible health insurance
Page 3, Line 4plan issued by an exchange established under the Colorado
Page 3, Line 5health benefit exchange created in article 22 of title 10, is
Page 3, Line 6allowed, subject to subsection (3) of this section, a credit
Page 3, Line 7against the income taxes imposed by this article 22 in an amount
Page 3, Line 8equal to twenty-five percent of the amount contributed to the
Page 3, Line 9health savings account during the taxable year for which the
Page 3, Line 10credit is claimed.
Page 3, Line 11(3) The amount of the credit allowed pursuant to this
Page 3, Line 12section shall not exceed:
Page 3, Line 13(a) Five hundred dollars for a single filer;
Page 3, Line 14(b) One thousand dollars for joint filers; and
Page 3, Line 15(c) One thousand five hundred dollars for contributions
Page 3, Line 16to a family health plan, whether the contribution is by a single
Page 3, Line 17filer or joint filers.
Page 3, Line 18(4) If the credit allowed pursuant to this section exceeds
Page 3, Line 19the income taxes due on the resident individual's income, the
Page 3, Line 20amount of the credit not used to offset income taxes is not
Page 3, Line 21carried forward as tax credits against the resident individual's
Page 3, Line 22subsequent years' income tax liability and is not refunded to the
Page 3, Line 23individual.
Page 3, Line 24(5) This section is repealed, effective December 31, 2037.
Page 3, Line 25SECTION 2. Act subject to petition - effective date. This act
Page 3, Line 26takes effect at 12:01 a.m. on the day following the expiration of the
Page 3, Line 27ninety-day period after final adjournment of the general assembly (August
Page 4, Line 112, 2026, if adjournment sine die is on May 13, 2026); except that, if a
Page 4, Line 2referendum petition is filed pursuant to section 1 (3) of article V of the
Page 4, Line 3state constitution against this act or an item, section, or part of this act
Page 4, Line 4within such period, then the act, item, section, or part will not take effect
Page 4, Line 5unless approved by the people at the general election to be held in
Page 4, Line 6November 2026 and, in such case, will take effect on the date of the
Page 4, Line 7official declaration of the vote thereon by the governor.