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Tax refunds for some Colorado families will increase in 2024 due to improvements to the Taxpayer’s Bill of Rights (TABOR). A more equal strategy is replacing income-based TABOR refund distribution. Colorado lawmakers made these payments consistent for all residents, reducing refunds for higher-income citizens and increasing them for lower-income residents.
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Colorado Shifts to Flat TABOR Refunds: Upcoming Payouts of $847 for Singles and $1,694 for Joint Filers
TABOR payouts were previously based on income, but Colorado legislators recently opted for a flat refund. Single taxpayers will expect a $847 refund and joint filers $1,694 in the coming year. This adjustment is expected to refund $3.28 billion to taxpayers.
Colorado voters rejected Proposition HH, prompting TABOR fund equalization. This proposal raised the state’s revenue cap, gave a property tax cut, and provided a one-time, universal TABOR refund. However, future tax refunds could be eliminated. After Proposition HH failed, lawmakers passed a bill that maintains TABOR refunds across the board.
In addition to TABOR refund adjustments, the Colorado legislature expanded the earned income tax credit. This expansion aims to cut TABOR refunds to $800. To offset equalized TABOR refunds, the earned income tax credit was expanded.
TABOR Refund Revisions: Impacts on Different Income Brackets in Colorado
Income-dependent TABOR fund distribution existed before these revisions. Earners up to $51,000 received $586, while those between $51,001 and $104,000 received $769. However, the current changes will only enhance TABOR money for persons earning up to $51,000 or $51,001 to $104,000.
The changes in TABOR refund distribution imply those earning over $104,001 will receive less. The new measure states that higher incomes in this category may receive $100 to $1,000 less. This new system attempts to help low-income households while maintaining a balanced approach across all income levels.
READ ALSO: Stimulus update: Colorado families can collect up to $1,694 in tax refunds in 2024
