Non-Colorado NOL deductions

An individual must make an addition on their Colorado return for any deduction claimed on their federal return for an NOL that is not allocated to Colorado. If an individual is a Colorado resident for the entire tax year in which the NOL was sustained, the entire NOL is allocated to Colorado.

If an individual is not a Colorado resident for any part of the tax year in which the NOL was sustained, the NOL is allocated to Colorado to the extent that it is derived from sources within Colorado. Guidance for determining the source of income and losses can be found in Department publication Income Tax Topics: Part-Year Residents & Nonresidents .

If an individual is a Colorado resident for only part of the tax year in which the NOL was sustained, the loss is allocated to Colorado in two steps. First, the NOL is allocated to Colorado to the extent that it is derived from sources within Colorado. Then, any remaining part of the NOL that is not allocated to Colorado based on source is allocated to Colorado by multiplying it by a fraction. The numerator of the fraction is number of days during the tax year that the taxpayer was a Colorado resident and the denominator is the total number of days in the tax year.