Part 3: Additions to Taxable Income

Colorado income tax is based on federal taxable income. However, Colorado law provides for a number of modifications to federal taxable income that apply in the calculation of Colorado tax. Additions are generally required for one of three reasons:

To impose Colorado income tax on certain types of income that are exempt from federal taxation;

To eliminate or reduce a deduction that is allowed under federal law, but not under state law (referred to as an “addback” of the amount deducted); or

To recapture a previously claimed subtraction.

This Part 3 provides information regarding the additions to federal taxable income that are required under Colorado law.