This summer, Colorado sales tax refunds are coming via check to everyone who filed Colorado income taxes by June 30, 2022. If you filed after that, you might be out of luck, or some people will get their Colorado Tabor refund 2022 in early 2023.
Update: The checks are in the mail!
What Is This Colorado Summer Tax Refund?
This is the Tabor tax refund that Colorado taxpayers normally get when they file their taxes. If you’re new to Colorado politics and government, taxpayers passed a law back in 1992 called the Taxpayer Bill of Rights, or TABOR. Among other things, it limits the amount of tax revenue the state can collect each year to an increase based upon inflation and population growth. If the state collects too much money, then it must refund the excess to taxpayers. This is often referred to as the TABOR surplus by politicians, and the TABOR refund by Coloradoans.
How Colorado TABOR Refunds Usually Work
The Colorado government runs on a fiscal year that runs from July to June, not a calendar year from January to December. Normally, when the fiscal year ends in June, the Colorado state government counts all of the tax collections it has, figures out how much it must refund to taxpayers, and then sets a refund rate based upon how much Colorado income tax you pay.
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Colorado taxpayers file their state income taxes at the same time as they file federal income taxes because Colorado income taxes rely on the numbers you report to the IRS. (This way, Colorado doesn’t have to pursue its own income tax fraud. The only way to lie on your Colorado income taxes is to lie the IRS as well.) So, typically, when the fiscal year closes in June, the state holds onto the money until taxpayers file their income taxes the following year where the refund gets calculated into your state income taxes. This way, the refund only goes to Colorado income tax filers (you have to file to get it) and the state doesn’t have to figure out any extra ways to refund the money. The other reason the state waits is that all of the accounting for the State of Colorado taxes more than a couple of minutes. The exact amount of the refund might take a few months to calculate precisely.
Above is Page 3 of Form DR 0104 Colorado Income Tax form used to file 2021 taxes in early 2022. The green section shows how much the refund is based upon the Modified AGI for TABOR. The yellow section is where taxpayers input the result of the TABOR calculation directly into their income taxes where it either increases a refund or decreases the amount of taxes owed to the state. Easy peazy, lemon squeazy.
How To File Colorado Income Taxes
What Is Different About TABOR Refunds for 2022?
Like most of the country, the economy did well in 2021. As a result, the state knows for sure that it collected more tax revenue than it is allowed to keep under TABOR rules. It does not know precisely how much, but it knows it will be more than $1.5 billion. So, knowing how popular the monthly payments for the child tax credit were in 2021 and knowing how much that helped the economy, Colorado figured it would do its version and send out $400 to each taxpayer in 2022, instead of making them wait until when taxes are filed in 2023. Whatever is left of any TABOR refund due to Colorado taxpayers will be calculated and paid via the 2022 Colorado income taxes that are filed in 2023, just like always.
The other different thing is that everyone gets $400, no matter how much income they have. So, someone earning minimum wage gets $400, and someone earning a million dollars gets $400.
Do I Have To Pay The Summer Colorado Tax Refund Back?
No. Just like the early child tax credits paid out by the feds in 2021, this is money that you would already be getting back. You are just getting it sooner than you normally would.
Will My Summer Colorado Tax Refund Be Direct Deposit?
No. Unlike the federal government, Colorado will not be using the bank information to direct deposit the funds in taxpayer accounts. Instead, they plan to mail 3 million checks. What could go wrong?
What If I Don’t Get My Summer Colorado Tax Refund?
You can call about your 2022 TABOR refund if you don’t get your check. There will likely be a way to claim it on your taxes next year as well.
What Is The Colorado Summer Refund Phone Number?
There is no phone number to call if I don’t get my Colorado summer refund yet. You can always but the people at the Colorado Department of Revenue. The phone number for Colorado Department of Revenue is 303-238-7378.
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Where may I find information about how to report the 2022 Tabor refund in 2023 federal or state filing?
A 1099-G should be in the mail to you in the coming days that will give you the numbers you need to add government refunds to your 2022 tax returns.