Colorado allows for a military retirement subtraction of up to $15,000 or your full retirement income, whichever is less. To qualify for the military retirement subtraction, you must be 54 or younger at the end of the tax year.
If you do not qualify for the military retirement subtraction, Colorado also offers a Pension and Annuity subtraction for taxpayers who meet certain qualifications. You can read more about this subtraction, here.
How do I exclude the income?
The program will automatically give the exclusion for the pension/annuity based off your age, if it has been entered on the federal return. To make any adjustments to the amount of pension being excluded, please go to:
- State Section
- Edit Colorado Return
- Subtractions from Income
- Military Retirement Benefits (under age 55)