Retiree’s Guide to Filing a Colorado Tax Return for 2024

Retirees filing a Colorado tax return in 2024 must understand updated income rules, credits, and documentation requirements. Filing isn’t always mandatory, but retirees often benefit from credits or refunds. Staying informed helps avoid missed deductions and ensures compliance with Colorado’s tax obligations. This guide allows retirees to confidently and clearly navigate Colorado’s specific rules.

The 2024 tax year brings notable updates affecting retirement income subtractions and senior-specific tax credits. Colorado adjusted thresholds for Social Security exemptions and expanded eligibility for the Property Tax, Rent, and Heat Rebate. Retirees can now use Form DR 0104CR more broadly to claim refundable credits. These changes aim to reduce tax burdens on fixed-income households and promote filing among low-income seniors.

Colorado defines retirees as individuals receiving a pension, IRA distributions, or Social Security benefits after workforce exit. Even with low taxable income, retirees may still need to file for benefits like refunds or rebates. Certain credits require a filed return, even if no tax is owed. Filing also creates a financial paper trail for future eligibility or audit purposes.

Do retirees need to file a Colorado tax return for 2024?

Retirees often assume that limited or no earned income means they can skip filing taxes, but that’s not always true in Colorado. Whether or not a retiree must file a Colorado tax return for 2024 depends on factors like income level, residency status, and eligibility for tax credits. Even when filing isn’t required, it can sometimes unlock valuable refunds or income tax credits.

Filing Requirements for Full-Year and Part-Year Residents and Nonresidents

Not every retiree is exempt from filing a Colorado income tax return. The state has specific guidelines based on residency and taxable income thresholds.

• Full-Year Residents Must File if Income Exceeds Federal Thresholds: Retirees who lived in Colorado all year must file a Colorado individual income tax return if their gross income exceeds the threshold that requires a federal return under Internal Revenue Service (IRS) rules.
  
  
• Part-Year Residents Must File If They Earned Income While in Colorado: You must file if you lived in Colorado for only part of 2024 and had any Colorado-source income. This includes interest, pension, or IRA distributions earned while a resident.
  
  
• Nonresidents Must File if They Have Colorado-Sourced Income: Even if you live in another state, you must file a Colorado tax return if you earned income from sales, rental property, or services performed in Colorado during the tax year.
  
  
• Income Includes Social Security, Pensions, and Withdrawals: While some Social Security income is excluded from Colorado income tax, it still counts when determining if you meet filing thresholds based on IRS guidelines.
  
  

When Retirees Must File a Colorado Individual Income Tax Return

The Colorado Department of Revenue uses income-based rules similar to the IRS, but some situations are unique to the state.

• You Must File if You Owe Colorado Income Tax: If, after all deductions and credits, you still owe any amount of income tax, you are required to file a return.
  
  
• You Must File to Claim a Refund or Tax Credit: Even if your taxable income is below the filing threshold, you must file a Colorado tax return for 2024 to receive a refund or to claim an income tax credit, such as the earned income tax credit.
  
  
• Joint Filing With a Spouse May Require It: If you earn income with your spouse or you’re jointly claiming certain tax credits, you may need to file to report combined income and get your refund correctly.
  
  
• You Must File if the IRS Requires It: If the Internal Revenue Service requires you to file a federal return, Colorado typically requires a state return, even if you are a retiree.
  
  

Situations Where Filing May Still Be Beneficial Even If No Tax Is Owed

Even when retirees aren’t legally required to file, doing so can still provide significant financial or administrative benefits.

• Claim Refunds From Withholding or Overpayment: If you had taxes withheld from pension or IRA distributions and don’t owe anything, you can only receive your money back by filing a return.
  
  
• Qualify for Income Tax Credit or Child Tax Credit: You may qualify for valuable credits like the child tax credit (if you’re caring for a dependent grandchild) or the earned income tax credit (in limited situations for part-time work).
  
  
• Get Property Tax or Heat Assistance Rebates: Some retirees qualify for tax credit programs like the Property Tax/Rent/Heat Credit rebate using Form DR 0104PTC, which requires filing.
  
  
• Use Revenue Online to Track Refund or File Free: Filing, even if not required, allows you to use Revenue Online to check refund status, access your account, or get free assistance with common tax topics.
  
  
• Document Income for Financial Aid or Public Services: Filing a tax return may help demonstrate eligibility for services, senior benefits, or income-based CPA assistance programs.
  
  

Filing a Colorado tax return for 2024 isn’t always mandatory for retirees, but it often opens the door to valuable credits, refunds, or public assistance. When in doubt, consult the Colorado Department of Revenue, a trusted CPA, or use Revenue Online to answer tax-related questions and determine the best action for your situation.

How Colorado income tax treats retirement income

When retirees file their Colorado tax return for 2024, it's essential to understand how Colorado income tax treats different types of retirement income. This includes exemptions for Social Security, deductions for pensions and IRAs, and how to use the subtraction schedule to lower your taxable income properly.

Social Security Income Is Partially or Fully Exempt

• The Colorado Department of Revenue allows retirees to exclude some or all of their Social Security income from Colorado income tax.
  
  
• Individuals aged 65 or older can subtract 100% of their Social Security benefits from Colorado taxable income, as long as those benefits were included in their federal tax return.
  
  
• This exemption helps reduce individual income tax liability, especially for retirees with limited income.
  
  

Retirement Income Subtraction for Pensions, IRAs, and Military Retirement

• Colorado offers a retirement income subtraction for qualifying pensions, IRA distributions, and military retirement pay.
  
  
• For the 2024 tax year, individuals 65 or older can subtract up to $24,000 in eligible retirement income from their Colorado income.
  
  
• Taxpayers between the ages of 55 and 64 can subtract up to $20,000 if the income qualifies under IRS guidelines.
  
  
• Married couples filing jointly may each claim this subtraction if both qualify, helping reduce their total taxes owed.
  
  

Use the Subtraction Schedule to Maximize Deductions

• To claim these exclusions, taxpayers must complete Schedule DR 0104AD, also known as the Schedule, as part of their Colorado individual income tax return.
  
  
• This form ensures accurate reporting of qualified subtractions, including Social Security, pension income, and military retirement benefits.
  
  
• Filing this form helps taxpayers avoid common errors and missed deductions during tax season, which can delay their refund status or trigger tax-related questions from the Colorado Department of Revenue.
  
  

Understanding how retirement income is treated under Colorado income tax law can significantly lower a retiree’s taxable income and improve their overall refund. Complete all necessary forms and consider consulting a CPA or using free assistance services for complex situations involving multiple income sources.

Income tax credit options available to Colorado retirees

Colorado offers several income tax credits to ease the financial burden for older adults, particularly those with low or fixed incomes. Below are the most crucial credit options available to retirees, including how to qualify and apply them to your 2024 state return.

1. Property Tax, Rent, and Heat (PTC) Rebate Credit: Colorado offers the Property Tax, Rent, and Heat Credit Rebate (PTC) to low-income seniors 65 and older and surviving spouses over 58 or disabled individuals over 18. To qualify in 2024, your income must be below $18,026 for single filers or $24,345 for married couples (figures may adjust slightly depending on COLA updates). If eligible, you can receive up to $1,000 in combined credits for rent, property tax, and heat-related expenses, even if you owe no income tax.
   
   
2. Colorado Earned Income Tax Credit (EITC) for Older Adults: Retirees still earning modest income through part-time work or self-employment may qualify for the state-level EITC, which mirrors the federal program. This credit is refundable, meaning you can receive money back without tax liability. While traditionally, for working families, some retirees who are legal custodians of dependent grandchildren or have other qualifying children can still benefit.
   
   
3. Child Tax Credit for Grandparent Caregivers: Retirees caring for grandchildren or minor dependents may qualify for the Colorado Child Tax Credit if the child meets residency and age criteria. Eligibility requires that the child was under age six at the end of 2023 and that the federal child tax credit was claimed for the same tax year. This credit is income-based and refundable, supporting limited-income senior caregivers.
   
   
4. How to Claim These Credits Using DR 0104CR: Form DR 0104CR (Colorado Credit Schedule) is the official form to report and apply income tax credits to your Colorado tax return. When filing your DR 0104 (Individual Income Tax Return), you must attach this form and complete all relevant credit sections based on your eligibility. For the PTC rebate, you’ll also need to include Form DR 0104PTC, even if you are not required to file a complete tax return.
   
   
5. Apply Early to Avoid Delays: You can submit your DR 0104CR and DR 0104PTC with your return starting in January 2025 for the 2024 tax year. Filing early helps ensure timely processing and avoids delays, especially if you expect a refund or rebate. Double-check that all required documentation, such as proof of rent or heat payments, is included with your filing.
   
   

Colorado retirees have multiple income tax credit opportunities that can result in significant savings or refunds—especially for those on low or fixed incomes. You can maximize these state-supported benefits by understanding eligibility rules and using the correct forms.

Can retirees claim the child tax credit on their Colorado income tax return?

Retirees in Colorado can claim the state child tax credit if they have qualifying dependents under age six during the tax year. To be eligible, the retiree or spouse must have earned income and meet specific income limits. This credit primarily benefits low- to moderate-income households, regardless of age, including those on fixed retirement incomes. Under current state guidelines, Social Security income alone does not qualify as earned income for this credit.

Retirees caring for grandchildren or young dependents may qualify if they claim the child as a dependent on their return. They must have provided over half of the child's support and lived with the child for more than half the year. To claim the credit, retirees must complete and attach Form DR 0104CN to their Colorado tax return. This form requires details on the qualifying child and income thresholds based on the federal adjusted gross income.

Step-by-step guide to filing a Colorado tax return for 2024 as a retiree

Filing your 2024 Colorado individual income tax return as a retiree involves a few specific steps designed to ensure you claim all the subtractions, exemptions, and credits you may qualify for. Here’s how to go through the process with clarity and confidence.

Gathering the Right Documents (SSA-1099, 1099-R, DR Forms)

Before filling out any forms, ensure you’ve collected all necessary documentation.

• Social Security Statement (SSA-1099): This form reports the total Social Security benefits you received, which you may be able to partially or fully subtract on your Colorado return.
  
  
• Retirement Income Statement (1099-R): The 1099-R shows distributions from pensions, annuities, IRAs, or retirement plans and is essential for calculating the retirement income subtraction.
  
  
• W-2s and Other Income Statements: If you worked part-time or received other income, include W-2s or 1099-INT/1099-DIV forms.
  
  
• DR 0104 (Individual Income Tax Form): This is the main form for Colorado income tax filing, required for all and part-year residents who meet the filing criteria.
  
  
• DR 0104AD (Subtractions Schedule): This form excludes subtractions from Colorado taxation, such as retirement income or railroad benefits.
  
  
• DR 0104CR (Credits Schedule): This form lets you apply for refundable and nonrefundable income tax credits, including those available to low-income seniors.
  
  
• DR 0104PTC (Property Tax, Rent, Heat Rebate): If you’re a low-income senior, this form may qualify you for a rebate even if you don’t owe income tax.
  
  

Collecting these forms in advance will make your filing process smoother and help avoid missing key deductions or credits.

Completing Your Federal Return Before Your Colorado Individual Income Tax Return

Colorado's tax system builds directly on your federal tax return information, so you must complete it first.

1. Calculate Your Federal Adjusted Gross Income (AGI): Your Colorado return begins with the AGI from your federal return, determining what income is subject to state taxation.
   
   
2. List Federal Taxable Social Security and Retirement Income: You need this detail to apply the appropriate subtractions when completing DR 0104AD.
   
   
3. Use IRS Forms Like 1040 and Schedules 1–3: These forms may report retirement distributions, credits, and deductions that affect your Colorado filing.
   
   

Completing your federal return ensures all income, deductions, and credits flow correctly into your Colorado tax documents.

Filing with DR 0104 and Claiming Appropriate Subtractions and Credits

Once your documents are ready and your federal return is complete, you can begin filling out your state return.

• Start with DR 0104: This form is the foundation of your Colorado return, where you enter your federal AGI and begin making Colorado-specific adjustments.
  
  
• Claim Retirement Subtractions on DR 0104AD: Retirees 65 and over can subtract up to $24,000 of qualifying pension and annuity income; those under 65 can subtract up to $20,000.
  
  
• Deduct Social Security Income if Qualified: Most Social Security income is not taxable in Colorado. DR 0104AD allows you to subtract this income if it was taxed federally.
  
  
• Apply for Income Tax Credits with DR 0104CR: Retirees may qualify for the low-income elderly credit, the child tax credit (if eligible), or the property tax/rent/heat credit.
  
  
• Don’t forget DR 0104PTC if you’re Low-Income: If you meet income limits and are 65 or older, file this form to apply for property tax, rent, or heat rebates.
  
  

Accurately completing these forms ensures you pay only what you owe—and may increase your chances of receiving a refund or credit.

Choosing the Right Filing Method: E-File vs. Paper

You can submit your Colorado tax return electronically or by mailing a paper return. Each method has its pros and cons.

• E-File Through Revenue Online: Colorado’s Revenue Online system is the fastest and most secure way to file. It allows for quicker processing and direct deposit of refunds.
  
  
• Third-Party Software Options: You can use approved software providers to e-file your return if you prefer a guided, step-by-step approach with auto-populated forms.
  
  
• Paper Filing if You Prefer Manual Control: Some retirees mail paper forms. While this gives complete visibility of every line, processing and refunds can take significantly longer.
  
  
• Know Where to Mail Paper Returns: Use the correct address listed in the DR 0104 instructions. Mailing to the wrong department can delay your return or cause it to be misprocessed.

Choosing the correct filing method depends on your comfort level, need for speed, and whether you qualify for free e-file services. By gathering all required documents, completing your federal return first, correctly filling out DR forms with eligible subtractions and credits, and selecting the best filing method, you can successfully file your Colorado tax return as a retiree. Following each step closely ensures you stay compliant while maximizing your tax benefits.  

Extension and late filing rules for the Colorado tax return for 2024

If you're a retiree filing a Colorado income tax return for 2024, it's essential to understand how extensions work and what penalties you might face—even if you file on time. Here's what you need to know about extensions, payments, and possible fees:

• You Automatically Get a Six-Month Filing Extension: Colorado grants an automatic six-month extension to file your individual income tax return, which moves the due date from April 15 to October 15, 2025. Unlike the federal IRS process, you must not submit a special request for this extension. However, this extension only covers filing the paperwork—it does not extend your time to pay any taxes owed.
  
  
• Use Form DR 0158-I if You Owe Money: If you anticipate owing Colorado income tax for 2024 and filing after April 15, you should submit Form DR 0158-I along with your estimated payment. DR 0158-I informs the state you're paying before filing the full return under the extension period. Filing this form helps avoid unnecessary penalties and interest by showing intent to pay on time, even if the full return comes later.
  
  
• Late Payment Still Triggers Penalties—Even with a Timely Filing: Filing your return on time under the extension does not protect you from late payment penalties if you haven’t paid what you owe by April 15. Colorado charges a penalty of up to 10% of the unpaid tax plus monthly interest on overdue amounts. To avoid these charges, you must pay at least 90% of your tax liability by the original due date, even if you file your return later.

Understanding these rules lets you file your return with peace of mind and avoid unnecessary costs or complications with the Colorado Department of Revenue.

FAQs

Do I need to file if I only receive Social Security?

If Social Security is your only source of income, you typically do not need to file a Colorado tax return. Colorado does not tax Social Security benefits, and you may not meet the income threshold that requires filing. However, if you received other taxable income—such as distributions from a pension or IRA—you may still need to file, depending on total income and eligibility for credits or subtractions.

How much of my pension is taxed under Colorado income tax?

Colorado allows a retirement income subtraction for pension income, including IRAs and annuities. For 2024, retirees age 65 or older can subtract up to $24,000, while those age 55–64 can subtract up to $20,000 from qualified retirement income. Any amount above these limits is subject to Colorado income tax. Military retirement pay is generally fully exempt, and the subtraction is claimed using Form DR 0104AD.

Am I eligible for the child tax credit or other income tax credits as a retiree?

Yes, retirees may qualify for various credits. If you care for a dependent child, you may be eligible for the Colorado Child Tax Credit, especially if your income is within qualifying limits. Additionally, low-income retirees may qualify for the Property Tax/Rent/Heat Rebate and the low-income senior credit. These credits are claimed using DR 0104CR or DR 0104PTC, and eligibility depends on age, income, and residency status.

Can I file jointly if only one spouse had income?

Yes, married couples in Colorado can file a joint income tax return even if only one spouse has income. Filing jointly often results in better tax benefits, including eligibility for a larger standard deduction and access to credits or subtractions based on household income. Ensure that both spouses’ names and Social Security numbers are listed on Form DR 0104, and complete the federal return jointly before preparing the Colorado return.

What if I moved to Colorado mid-year?

If you moved to Colorado in 2024, you are considered a part-year resident and must file a Colorado Individual Income Tax Return if you had income while residing there. You’ll use Form 104PN to allocate income earned inside and outside Colorado. You may also qualify for retirement income subtractions on income received during your Colorado residency, and you can claim applicable credits if you meet eligibility requirements for the months you lived in the state.