The proposed bill, HB25-1045, aims to enhance Colorado's state income tax credit for purchasing long-term care insurance. Key provisions include:
Increased Eligibility Thresholds:
For income tax years commencing on or after January 1, 2025, the bill proposes to double the federal taxable income (FTI) thresholds for taxpayers to qualify for the credit.
Single filers and joint filers claiming one insurance policy would have an FTI threshold of $100,000.
Joint filers claiming two insurance policies would have an FTI threshold of $200,000.
Doubled Credit Amount:
The bill proposes to double the maximum credit amount allowable per taxpayer per year from $150 per policy claimed to $300 per policy claimed.
For income tax years commencing on or after January 1, 2026, the credit amount would be annually adjusted for inflation.
These changes aim to make the credit more accessible to a broader range of taxpayers and provide greater financial relief for those purchasing long-term care insurance.
Summary
Legislative Oversight Committee Concerning Tax Policy. For
income tax years commencing on or after January 1, 2025, the bill both:
•
Increases the amount of federal taxable income a taxpayer may have and still qualify for the state income tax credit for purchasing long-term care insurance and annually adjusts that federal taxable income amount for inflation; and •
Doubles the amount of the credit a taxpayer may claim and, for income tax years commencing on or after January 1, 2026, annually adjusts the credit amount for inflation.
