Middle Class College Savings Act

For purposes of calculating a taxpayer's Colorado taxable income, current state law begins from a base of the taxpayer's federal taxable income and provides for various modifications to that base, including subtractions from federal taxable income (state income tax deductions) in amounts equal to the full amounts of both contributions made by a taxpayer to the qualified state tuition program established by collegeinvest and distributions of investment earnings taken from the plan. The bill modifies these state income tax deductions by making the percentages of the amounts of contributions or distributions allowed to be subtracted from a taxpayer's taxable income dependent upon the amount of the taxpayer's federal adjusted gross income as follows:

• 200% of the amounts of contributions or distributions for a taxpayer whose federal adjusted gross income is $150,000 or less;
• 150% of the amounts of contributions or distributions for a taxpayer whose federal adjusted gross income is more than $150,000 but not more than $250,000; and
• 40% of the amounts of contributions or distributions for a taxpayer whose federal adjusted gross income is more than $250,000 but not more than $500,000.

The bill eliminates deductions for a taxpayer whose federal adjusted gross income is more than $500,000.

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)