HB21-1113 Summary

• Extends Colorado's temporary income tax deduction for military retirement benefits by 10 years, from expiring in 2024 to expiring in 2035 for individuals under 55 years old.

• Increases the maximum deduction amount to $20,000 per tax year for income tax years commencing January 1, 2023 and thereafter (previously capped at $15,000 for 2022-2023).

• Does not modify existing deductions for individuals age 55 and older, which remain capped at $20,000 (ages 55-64) or $24,000 (ages 65+).

• Adds legislative findings that Colorado's military pension tax treatment is less favorable than best-practice states, and declares the deduction is intended to honor veterans' service and encourage military retirees to relocate to Colorado.

• Requires the General Assembly and State Auditor to measure the effectiveness of the tax expenditure in benefiting military retirees.