Colorado allows for a subtraction of pension or annuity income and the amount is based upon the age of the taxpayer.
- Age 65 or older: you can deduct up to $24,000 or the taxable amount of your pension, whichever is smaller.
- At least age 55 but not yet 65: you can subtract up to $20,000 or the taxable amount of your pension, whichever is smaller.
- Under age 55 and received pension as a secondary beneficiary due to a death: you can subtract up to $20,000 or the amount received, whichever is smaller.
The program will automatically give the exclusion for the pension/annuity based off your age, if it has been entered on the federal return.
Where to enter?
- State Section
- Subtractions from Income
- Pension/Annuity Income
You can read more about this subtraction on the Colorado website