CO SB073

Prohibits Colorado state income tax deductions for contributions to 529 qualified education savings plans if the funds are intended for elementary or secondary school tuition expenses, effective for tax years commencing January 1, 2021.

Clarifies that expenses for tuition at public, private, or religious K-12 schools are not "qualified higher education expenses" under Colorado law, despite being permitted under the federal Tax Cuts and Jobs Act of 2017.

Requires distributions from 529 accounts for K-12 tuition to be added back to the account holder's taxable income for the year the withdrawal occurs, unless the withdrawal qualifies for other exemptions.

Mandates that the Colorado College Invest 529 program provide annual secure reports to the Department of Revenue beginning January 1, 2021, containing taxpayer information and details about contributions and unqualified distributions for tax administration purposes.

Appropriates $11,040 to the Department of Revenue for the 2020-21 fiscal year to support GenTax IT system modifications for implementing the tax administration changes.