SENATE
                       3rd Reading Unamended
       April 26, 2016         SENATE
                       2nd Reading Unamended
                      April 25, 2016Second Regular Session
               Seventieth General Assembly
                    STATE OF COLORADO
                                                REENGROSSED
                       This Version Includes All Amendments
                       Adopted in the House of Introduction
 LLS NO. 16-0906.01 Ed DeCecco x4216     SENATE BILL 16-086
                   SENATE SPONSORSHIP
 Neville T.,  Marble, Holbert, Baumgardner, Woods
 
                    HOUSE SPONSORSHIP
 Neville P.,  Saine, Everett, Humphrey
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Senate Committees
 House Committees
 
 
 Finance
 
 
 
 Appropriations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                         A BILL FOR AN ACT
       Concerning the elimination of the cap on the state income
            tax deduction for retirement benefits.
       
       
                           Bill Summary
       
            (Note:  This summary applies to this bill as introduced and does
       not reflect any amendments that may be subsequently adopted. If this bill
       passes third reading in the house of introduction, a bill summary that
       applies to the reengrossed version of this bill will be available at
       http://www.leg.state.co.us/billsummaries.)
       
            The starting point for determining state income tax liability is
       federal taxable income. This number is adjusted for additions and
       subtractions (deductions) that are used to determine Colorado taxable
       income, which amount is multiplied by the state's 4.63% income tax rate.
       Currently, a person who is 55-64 years old may deduct up to $20,000 of
       amounts received as pensions or annuities from any source from federal
       taxable income, and a person who is 65 years old or older may deduct up
       to $24,000.
            The bill eliminates these limits and allows a person to claim a state
       income tax deduction for the entire amount of his or her pension or
       annuity payments.
       
       
       
       Be it enacted by the General Assembly of the State of Colorado:
            SECTION 1.  In Colorado Revised Statutes, 39-22-104, amend
       (4) (f) (III) as follows:
            39-22-104.  Income tax imposed on individuals, estates, and
       trusts - single rate - definitions - repeal. (4)  There shall be subtracted
       from federal taxable income:
            (f) (III)  For income tax years commencing on or after January 1,
       1989, but prior to January 1, 2017, amounts subtracted under this
       paragraph (f) shall not exceed twenty thousand dollars per tax year;
       except that, for income tax years, commencing on or after January 1,
       2000, but prior to January 1, 2017, amounts subtracted under
       subparagraph (I) of this paragraph (f) shall not exceed twenty-four
       thousand dollars per tax year for any individual who is sixty-five years of
       age or older at the close of the taxable year. For the purpose of
       determining the exclusion allowed by this paragraph (f), in the case of a
       joint return, social security benefits included in federal taxable income
       shall be apportioned in a ratio of the gross social security benefits of each
       taxpayer to the total gross social security benefits of both taxpayers. For
       the purposes of this paragraph (f), "pensions and or annuities" means
       retirement benefits that are periodic payments attributable to personal
       services performed by an individual prior to his or her retirement from
       employment and that arise from an employer-employee relationship, from
       service in the uniformed services of the United States, or from
       contributions to a retirement plan which are deductible for federal income
       tax purposes. "Pensions and or annuities" includes lump-sum
       distributions from pension and profit sharing plans to the extent that such
       distributions qualify for the tax-averaging computation under section 402
       (e) (1) of the internal revenue code, distributions from individual
       retirement arrangements and self-employed retirement accounts to the
       extent that such distributions are not deemed to be premature distributions
       for federal income tax purposes, amounts received from fully matured
       privately purchased annuities, social security benefits, and amounts paid
       from any such sources by reason of permanent disability or death of the
       person entitled to receive the benefits.
            SECTION 2.  Act subject to petition - effective date. This act
       takes effect at 12:01 a.m. on the day following the expiration of the
       ninety-day period after final adjournment of the general assembly (August
       10, 2016, if adjournment sine die is on May 11, 2016); except that, if a
       referendum petition is filed pursuant to section 1 (3) of article V of the
       state constitution against this act or an item, section, or part of this act
       within such period, then the act, item, section, or part will not take effect
       unless approved by the people at the general election to be held in
       November 2016 and, in such case, will take effect on the date of the
       official declaration of the vote thereon by the governor.