Specific lines provided on Colorado income tax forms for subtractions from income

19 Oct Specific lines provided on Colorado income tax forms for subtractions from income

Taxpayers and tax professionals should note that the Colorado individual income tax form (104) and the Colorado corporation income tax form (112) have specific lines on them for Subtractions from Federal Taxable Income, such as

• United States government interest and pension-annuity subtractions for individuals;

• exempt federal interest,

• excludable foreign source income subtractions for corporations, and

• Colorado source capital gain subtraction for individuals and corporations.

Use the specific lines on these returns for each type of subtraction.  Do not lump all subtractions under “Other subtractions.”  Additionally, do not list non-deductible items as depreciation and foreign income. This will cause delays in reviewing the income tax return and any refund.  Most problems are occurring on the 104 and 112 forms where a partnership or fiduciary subtraction is listed under the “Other subtractions” for all deductions that apply to the taxpayer.  Again, this will delay processing of the return and the taxpayer will receive correspondence requesting clarification.