The Re-acquisition of Colorado Residency During Active Duty Military Service Subtraction was formerly known as the Colorado Home Subtraction. This subtraction is only allowed to military servicemembers who meet several requirements. To meet the qualifications for the subtraction the servicemember must (1) have Colorado listed as their home of record, (2) after joining the military, have established legal residency in a state that is not Colorado and, (3) on or after January 1, 2016, have reacquired Colorado residency.
A military servicemember who meets these three requirements can claim a subtraction for any income included in their federal taxable income that they received for active duty service after reacquiring Colorado residency.
For the taxpayer to have acquired residency in another state, you must have:
- been physically present in that state,
- plan to make that state your permanent home, and
- plan to give up your prior state of legal residence.
To reacquire residency in Colorado, you do not have to be physically present in Colorado, but you must plan to make Colorado your permanent home and to give up your prior state of legal residence.
To be eligible for this subtraction, a taxpayer must include with their return: (1) a military form listing Colorado as their home of record, (2) proof of residency acquisition in another state, and (3) proof of reacquiring residency in Colorado during the taxable year. Proof of acquiring residency in another state and reacquiring residency in Colorado must come in the form of one of the following items:
- Voter registration card;
- Documents showing the purchase of residential property or an unimproved residential lot;
- Automobile title and registration;
- Notify your prior state of legal residence of your plan to change your state of legal residence;
- Prepare a new last will and testament indicating your state of legal residence.
If you qualify for this subtraction, enter the total amount of income received for active duty military service and submit all required proof of residency with your return.
For additional information: