Colorado politicians want the IRS to keep the state’s TABOR refunds tax-free, as they have been for decades. They don’t want taxpayers to have to deal with more confusion and financial stress.
Colorado Lawmakers Urge IRS to Keep TABOR Refunds Tax-Free for Third Consecutive Year
Colorado Newsline says that officials are asking the IRS not to tax the state’s TABOR refunds for the third year in a row. Members of Congress from both parties write to IRS Commissioner Danny Werfel to say that these returns should not be taxed. A lot of people are worried that charging these payments will make things more difficult for people who are already struggling financially.
The problem began in 2022, when the IRS thought about taxing special state refunds that were paid out because of the COVID-19 pandemic. Colorado had given flat refunds of $750 to people and $1,500 to joint filers. This was different from how they usually do things, which is based on income. At first, the IRS said that these refunds might be taxed, but for 2022 and 2023, they chose not to. New information says that refunds in the future might be taxed, but this problem should be fixed by new state rules.
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Governor Jared Polis Thanks Lawmakers and Urges IRS to Maintain Tax-Free Status for TABOR Refunds
Governor Jared Polis thanked the politicians for helping to make sure that TABOR refunds would not be taxed. He made it clear that new taxes should not be put on TABOR, which forces the state to return extra money it makes over certain limits. As has always been the case, the governor asks the IRS to keep following the rule that these returns are not taxed.