Coloradan Taxpayers to Receive $800 TABOR Refunds in 2023
Coloradan taxpayers can expect a TABOR refund of $800 when they file their state income tax returns early next year.
This refund is a result of revenue collected above the cap set by the Taxpayer’s Bill of Rights (TABOR), a state constitutional amendment passed by voters in 1992 to limit the growth of government.
Unlike in 2022, when taxpayers received a physical check in the mail, this year's refunds will be collected through tax filings in the form of higher refunds or reduced tax bills. The state is set to refund a total of nearly $3.7 billion in over-collected revenue, providing much-needed relief to hardworking Coloradans.
Although the $800 per taxpayer is slightly lower than prior projections due to additional spending by Democrats during the ‘extraordinary’ special session called by Governor Polis to address property taxes. An undertaking that the Democratic led legislature failed to do adequately do.
Under the previous system, varying TABOR rebate amounts were determined based on income, with higher-income households receiving higher shares due to their greater tax contributions.
The revised approach guarantees the same amount will be refunded to all Coloradan despite the dollar amount of the refund the taxpayer is entitled to; a system most Coloradans believe is unfair. This means that individuals reporting incomes of less than $104,000, which accounts for approximately 62% of filers, will receive higher refunds compared to the previous six-tier system.
Specifically, households with less than $51,000 in income will see an additional $250 in their pockets, while those reporting $51,000 to $104,000 in income will enjoy an extra $75.
In addition to the TABOR refunds, during the special session Democrats spent more taxpayer refund dollars to increase the Earned Income Tax Credit (EITC) for low-income households.
The state will now match up to 50% of the federal tax credit, which is determined by a person's income. To fund this expansion, approximately $182.5 million was diverted from TABOR refunds.
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THE GOVERNOR WHO IS TRYING TO TAKE AWAY TABOR REFUNDS PERMANENTLY
DESPITE TAXES YOU PAID, YOUR TABOR REFUND WILL BE SAME AS EVERYONE ELSE
EVEN DEMOCRAT GOVERNOR POLIS CALLS BIDEN POTENTIAL TABOR TAX “ABSURD”
According to legislative economists, Colorado's economy is projected to be smaller in future years, with a surplus of about $1.8 billion in the current fiscal year, which ends on June 30. An even similar surplus is anticipated for the 2024-25 fiscal year. Furthermore, the 2025-26 fiscal year is forecasted to have a $2 billion surplus.
These surpluses are determined by the TABOR revenue cap, which is calculated using a formula based on population growth plus inflation. While there is always some level of uncertainty, the overall outlook for Colorado's economy remains positive.