IRS chooses not to tax Colorado TABOR refunds from 2022

DENVER, Colo. (KRDO) -- Friday, the Internal Revenue Service (IRS) decided to not tax Colorado TABOR payments from 2022.

The department said that while in general, payments made by states are counted in income for federal tax purposes, there are also expectations that apply to many of the payments made by states in 2022.

That exception includes TABOR payments. This decision will save Colorado taxpayers from paying $400 million collectively.

TABOR checks were mailed out for $750 for single filers and $1,500 for dual filers. After the passing of Senate Bill 22-233, 'Colorado Cashback' checks were pushed out early and at a time when other states sent out stimulus checks in response to inflation. Those stimulus checks or rebates are not the same as TABOR, which is excess tax revenue, and written into the Colorado Constitution.

The Department of Revenue issued a statement Thursday, saying it strongly believes the refunds are non-taxable.

The IRS asked people in the 18 states, including Colorado, to delay filing until it comes to a decision.

This decision comes after state officials called on the IRS not to tax TABOR>