Colo. Code Regs. 39-22-104(4)(m)
Current through Register Vol. 47, No. 23, December 10, 2024
Rule 39-22-104(4)(m) - Charitable Contribution Subtraction for Taxpayers Claiming the Federal Standard Deduction(1) A taxpayer who claims the basic standard deduction on their federal income tax return pursuant to I.R.C. § 63(c)(2) can subtract on their Colorado income tax return the amount of charitable contributions in excess of five hundred dollars that the taxpayer could have claimed pursuant to I.R.C. § 170 if the taxpayer had not claimed the basic standard deduction. The subtraction is not available to taxpayers who are not allowed to claim the federal basic standard deduction, such as: (a) Taxpayers for whom a dependency exemption is allowable to another taxpayer, even when a partial standard deduction is allowed under I.R.C. § 63(c)(5);(b) Married individuals filing separate returns, when one spouse itemizes deductions(d) Any individual who cannot claim the federal standard deduction because the individual has a short tax year; or(e) Estates, trusts, or other entities that are not "individuals."(2)Limitations.(a) In determining the amount of the subtraction, I.R.C. § 170 shall govern, including the dollar limits on the amount of the contribution that can be claimed in any given tax year, any special rules regarding certain property, any limitations on contributions of clothing and household items, and what qualifies as a charitable contribution. For example, (i) The charitable contribution subtraction is limited by a taxpayer's contribution base as stated in I.R.C. § 170(b).(ii) A claim in excess of $5,000 for a noncash charitable contribution of one item or a group of similar items generally requires an appraisal.(b)Itemized Deduction Phase-Out. Because the subtraction is equal to the amount of any deduction based upon the amount of a qualifying charitable contribution, any itemized deduction phase-out due to the level of adjusted gross income shall be applied to the calculation of the subtraction.(c)Carryforward. A carryforward of the charitable contribution subtraction is prohibited. The federal charitable contribution carryforward may never be claimed on a Colorado income tax return.(3)Aggregation. The dollar amount of all charitable contributions for the tax year are aggregated to determine whether the value of the charitable contributions exceed the $500 threshold (i.e., the value of each contribution need not exceed the $500 threshold so long as the sum of all qualified contribution for the tax year exceed $500).(4)Documentation and Substantiation.(a) A taxpayer must comply with the substantiation requirements set forth in I.R.C. § 170, including qualified appraisals, limitations on clothing and household items, and the documentation of cash contributions.(b) Any claims of charitable contributions in excess of the applicable federal standard deduction must be accompanied by a clear written explanation and documentation demonstrating why the federal standard deduction was claimed.(5)Part-Year and Nonresidents. The subtraction is available to taxpayers who are required to file a Colorado income tax return, including part-year and nonresident taxpayers. When computing the Colorado tax liability of a part-year resident or nonresident, the subtraction is applied to compute the tentative Colorado tax liability before the tentative Colorado tax is apportioned.Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/14/201437 CR 18, September 25, 2014, effective 10/15/201437 CR 19, October 10,2014, effective 10/30/201437 CR 22, November 25, 2014, effective 12/16/201438 CR 04, February 25, 2015, effective 3/17/201538 CR 07, April 10, 2015, effective 4/30/201538 CR 11, June 10, 2015, effective 6/30/201538 CR 22, November 25, 2015, effective 12/15/201538 CR 24, December 25, 2015, effective 1/14/201638 CR 24, December 25, 2015, effective 1/19/201639 CR 01, January 10, 2016, effective 1/30/201639 CR 16, August 25, 2016, effective 9/14/201640 CR 08, April 25, 2017, effective 5/15/201740 CR 12, June 25, 2017, effective 7/15/201740 CR 16, August 25, 2017, effective 9/14/201740 CR 23, December 10, 2017, effective 1/1/201841 CR 14, July 25, 2018, effective 8/14/201841 CR 20, October 25, 2018, effective 11/14/201842 CR 02, January 25, 2019, effective 12/18/201842 CR 02, January 25, 2019, effective 12/18/2018, expires 4/17/201942 CR 06, March 25, 2019, effective 4/14/201943 CR 04, February 25, 2020, effective 3/16/202043 CR 13, July 10, 2020, effective 6/2/202043 CR 17, September 10, 2020, effective 9/30/202044 CR 03, February 10, 2021, effective 3/2/202144 CR 07, April 10, 2021, effective 4/30/202144 CR 08, April 25, 2021, effective 5/15/202145 CR 01, January 10, 2022, effective 1/30/202245 CR 04, February 25, 2022, effective 3/17/202245 CR 05, March 10, 2022, effective 3/30/202246 CR 11, June 10, 2023, effective 5/2/202346 CR 09, May 10, 2023, effective 5/30/2023