Part 4: Subtractions from 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. Subtractions are generally allowed to either fully or partially exempt from state taxation an item of income that is subject to federal taxation or provide a state-level tax deduction for an expense or contribution that is not deductible in the calculation of federal income tax. This Part 4 provides information regarding the subtractions from federal taxable income that are allowed under Colorado law. Department publications referenced in Part 4 are available online at Individual Income Tax Guidance Publications .