HB 20-1420: Tax Fairness Act Summary

• Requires taxpayers with adjusted gross income exceeding $500,000 (single filers) or $1,000,000 (joint filers) to add back the Section 199A pass-through deduction for tax years 2021-2022, effective for income tax years commencing on or after January 1, 2021 but before January 1, 2023.

• Eliminates certain CARES Act tax provisions for Colorado income tax purposes, including expanded net operating loss deductions and excess business loss deductions, for tax years ending after the CARES Act's enactment but before January 1, 2021.

• Increases the state earned income tax credit from 10 percent to 15 percent of the federal credit for tax years beginning on or after January 1, 2022, and extends eligibility to residents without valid Social Security numbers.

• Transfers $113 million to the State Education Fund on March 1, 2021, and $23 million on March 1, 2022, from the General Fund.

• Appropriates $49,002 to the Department of Revenue for 2020-21 fiscal year to implement the act.