The bill lets Colorado temporarily suspend or scale back most income tax credits (except housing and EITC) if state revenues exceed TABOR limits, based on forecasts. It also restructures several clean-energy tax credits into a system where credits are sold in 2025–26 but only usable in 2030, and makes the Family Affordability Tax Credit nonrefundable.
For taxpayers: Most credits could be suspended or reduced depending on revenue forecasts, creating uncertainty in tax planning. Some credits (housing and EITC) are protected. Clean-energy and e-bike credits shift to a certificate model, with benefits deferred to 2030.
For the state: Provides a mechanism to protect the general fund and TABOR refunds in high-revenue years by limiting tax credit outflow. Selling credits up front brings $40 million into the budget sooner, while delaying when taxpayers can use them.
For policy: Signals a shift from broad refundable credits to a more controlled, budget-driven system where credits act as a “release valve” tied to revenue conditions.
