HB 22-1123 Summary

• Creates a state income tax subtraction for taxpayers claiming the federal standard deduction, effective for tax years beginning January 1, 2023.

• Subtraction amount is calculated using the formula AS = SD(CPI + MFI), rounded up to the nearest $50 increment, where SD is the unadjusted standard deduction claimed.

• CPI component equals the percentage change in the Denver-Aurora-Lakewood consumer price index for all items from 2017 to the most recent year.

• MFI component adds twenty thousandths of a percent for every percent that the motor fuel index exceeds the CPI increase since 2017.

• Exempts this tax expenditure from the standard tax expenditure performance statement and repeal requirements under Colorado law.