State Income Tax Deduction Addback Instruction Form - 2006
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3TAXPAYER SERVICE DIVISION
FYI – For Your Information
State Income Tax Deduction Addback
deduction for joint filers was increased to
Individuals who itemize deductions on
their federal returns, must add back on
twice the amount of the standard deduction
the Colorado return any state income tax
for single filers.
included in their federal deductions.
Enter this modification on line 2 on the
DETERMINING YOUR ADDBACK
Colorado Individual Income Tax Return
AMOUNT
(Form 104). Estates and trusts must also
When to Use the State Income Tax
add back this deduction on Form 105.
Deduction from the Federal Schedule A
[§39-22-104(3)(d), C.R.S.]
Example 1: Mr. Green had gross income of
If you do not itemize deductions on your
$50,000 during the tax year. He files head
federal income tax return, you will not be
of household. His itemized deductions on
required to add back your state income
the federal Schedule A totaled $12,000. Of
tax on your Colorado return.
that amount, $4,000 represented the state
income tax deduction. For the purpose of
If you do itemize deductions on your
this example, the federal standard deduc-
federal income tax return but deduct
tion for head of household is $7,550.
general sales taxes on line 5, Schedule A,
Form 1040, you do not add back your
ON THE FEDERAL FORM
taxes on your Colorado return.
Gross Income
$50,000
Standard Deduction Benefit Rule
Total Itemized Deductions
-$12,000
(including a
Basic rule
Federal Taxable Income
$38,000
$4,000 state
If your federal itemized deductions
income tax
deduction,
exceed the standard deduction you could
line 5,
have claimed by less than the state tax
Schedule A)
deduction, you should addback only the
ON THE COLORADO FORM
difference between the itemized and
Federal Taxable Income
$38,000
standard deduction amounts. (See
example 2).
Colorado Addback
+$ 4,000
Colorado Taxable Income
$42,000
Exception for Tax Years 2000-2002
NOTE: If Mr. Green had not itemized,
For tax years beginning on or after
his standard deduction would
January 1, 2000 but prior to January 1,
have been $7,550.
2003, for the purpose of computing this
addback the appropriate standard deduc-
In the above situation, the difference
Colorado Department
tion for a married couple filing a joint
of Revenue
between Mr. Green's total itemized deduc-
return is double the basic standard
Taxpayer Service Division
tions for federal purposes ($12,000) and
1375 Sherman St.
deduction for a single taxpayer. Taxpay-
the standard deduction he would have
Denver, Colorado 80261
ers who are 65 or older and/or blind
taken ($7,550) is $4,450 — more than the
Forms and other services:
should add any additional standard
$4,000 he claimed as a state income tax
(303) 238-FAST (3278)
deduction to the doubled basic standard
Assistance:
deduction. Therefore, he will want to use
(303) 238-SERV (7378)
deduction to compute the addback. This
the smaller amount, which in this case is
exception does not apply to tax years
$4,000, as the Colorado addback.
after 2002 because the federal standard
PAGE 1 OF 3
INCOME 4 (11/06)
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