Great news for Colorado taxpayers! Next year, you can expect even larger refund checks than originally predicted. The TABOR surplus, estimated to be around $2.2 billion in March, has ballooned to over $3 billion.
This means you might be getting nearly $1 billion more in refunds than initially anticipated. That’s a lot of extra cash coming your way.
The nonpartisan Legislative Council Staff and the governor’s Office of State Planning and Budgeting recently shared this exciting update with state lawmakers. They mentioned that refund checks could increase by hundreds of dollars per person.
However, the exact refund amounts are still uncertain. It all depends on whether Proposition HH, a 10-year property tax relief plan proposed by Democrats in the General Assembly and Governor Jared Polis, gets approved in the November vote.
If Proposition HH passes, refund checks will be the same for everyone. They were expected to be around $650 for single filers and $1,300 for joint filers. But now, those numbers could go up to approximately $850 for single filers and $1,700 for joint filers. That’s even more money back in your pockets.
But what happens if Proposition HH doesn’t pass? Well, then refund checks will be based on your income level. They’ll use a system called the six-tier sales tax refund mechanism. Here’s the exciting part: the improved economic outlook means that regardless of your income tier, you’ll get a larger refund!
Here’s what you need to know about eligibility criteria:
- You could be eligible for a refund check if you earn up to $50,000 a year (lowest income tier).
- Initially, the refund amounts were supposed to be $454 (for single filers) and $908 (for joint filers).
- However, the new amounts have increased to $587 (single filers) and $1,174 (joint filers).
- If you’re in the highest income tier (earning $279,001 or more), you could receive a refund check of $1,854 (single filers) or $3,708 (joint filers).
The size of the refund checks is determined by how much extra money the state collects beyond the TABOR cap on government growth and spending. This cap is calculated using population growth and inflation rates. So, if the economy continues to perform well, you can look forward to receiving your refund checks next year after filing your taxes.
Remember, TABOR stands for the Taxpayer’s Bill of Rights. It’s a constitutional amendment from 1992 requiring voter approval for Colorado’s tax increases. The amendment also puts a limit on government spending and mandates that any surplus tax revenue must be refunded to taxpayers like you. It’s a way to make sure your hard-earned money stays in your pocket.
So mark your calendars and get ready to receive those refund checks next year! The positive economic outlook, driven by better-than-expected corporate income tax revenue, is bringing smiles to taxpayers’ faces. Of course, there’s always a chance of economic ups and downs, but the risk has decreased since March.
In the meantime, keep an eye out for the next quarterly tax revenue and economic forecasts in September. The state’s 2024-25 fiscal year budget will be drafted in November. Colorado’s strong economy is an awesome place to live, work, and do business!