IRS decides Colorado TABOR refund will not be taxed on the federal level

DENVER (KKTV) - The IRS announced on Friday Coloradans will not have to pay federal income tax for their TABOR refunds.

Click here for more on TABOR. Under Colorado state law, excess sales tax revenue is returned to taxpayers. Last year, single taxpayers received $750 while joint filers received $1,500.

“We, like millions of Coloradans, are breathing a sigh of relief that the IRS and federal government have stepped away from taxing our refunds this year. This ultimately is the best outcome for families and individuals and we will continue seeking out more ways to save people money,” said Governor Polis. “I will continue fighting to maintain this precedent that refunds under TABOR should never be taxed.”

The taxability of the refunds was called into question on Feb. 3 when the IRS released a statement telling Americans to delay filing until they determined whether the stimulus checks sent out by over 19 different states last year were subject to federal income tax, including Colorado. Governor Polis and the state’s congressional delegation advocated strongly to ensure TABOR refunds would not be taxed, especially given how close we are to the tax filing deadline.