State income tax refunds

A subtraction is allowed for the amount of any state income tax refunds, credits, or offsets reported on an individual’s federal return and included in their federal taxable income. An individual is generally required to report a state income tax refund on their federal return only if they claimed itemized deduction for the tax year in which the state income tax was paid. The subtraction a taxpayer can claim on their Colorado return is generally the amount of any state income tax refund reported on line 1 of their IRS Schedule 1.