The starting point for determining state income tax liability is federal taxable income. This number is adjusted for additions and subtractions (deductions) that are used to determine Colorado taxable income, which amount is multiplied by the state's 4.63% income tax rate.
The bill allows an employer, whether filing as an individual or a corporation, to claim a deduction for any amount that the employer contributes to an employee's college trust account or savings account that is administered by collegeinvest. This deduction may be claimed even if the contribution has already been deducted from the employer's federal taxable income.
(Note: This summary applies to this bill as introduced.)