Colorado taxpayers will benefit from another round of TABOR reimbursements in 2025. The Taxpayer’s Bill of Rights (TABOR), which restricts the amount of money the state can collect and mandates that any excess be returned to taxpayers, makes these refunds possible.
This is a summary of what to anticipate from the 2025 TABOR rebate and the potential amount that could be in your pocket.
Overview of the TABOR Rebate
For the fiscal year 2023–2024, Colorado collected $1.4 billion more than the TABOR cap. Additionally, the 2025 refunds will include $289 million that was previously underrefunded.
Although future refunds are unknown due to the possibility of state budgets being tighter in the upcoming years, taxpayers are expected to receive a sizable refund as a result.
How Will Your Refund Be Sent to You?
Coloradans can get their TABOR rebates in one of three ways for the 2025 refunds:
- Direct Deposits: Refunds will be sent straight into the bank accounts of taxpayers who choose direct deposit when submitting their taxes.
- Paper checks will be mailed to taxpayers who have not set up direct deposit, much like in prior years.
- Prepaid Debit Cards: Using prepaid debit cards, which function similarly to cash, is an additional way to receive the rebate.
Reduced Temporary Income Tax Rate
In 2025, taxpayers will also benefit from a temporary decrease in the state income tax rate as part of the TABOR refund procedure. Residents will benefit from significant savings when the tax rate drops from 4.45% to 4.25%.
When you file your income tax return for the 2025 tax year, this deduction will be applied automatically, putting a little extra cash in Colorado residents’ pockets.
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Six-Level System for Sales Tax Refunds
The implementation of a six-tiered sales tax refund scheme is one of the significant improvements for 2025. The purpose of this approach is to guarantee that refunds are given out in accordance with the adjusted gross income (AGI) of the taxpayer.
The refunds will be given out as follows:
| Adjusted Gross Income | Single Filers | Joint Filers |
| Up to $53,000 | $177 | $354 |
| $53,001 to $105,000 | $240 | $480 |
| $105,001 to $166,000 | $277 | $554 |
| $166,001 to $233,000 | $323 | $646 |
| $233,001 to $302,000 | $350 | $700 |
| $302,001 and up | $565 | $1,130 |
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How Much Will Your Wallet Hold?
For many Colorado residents, the 2025 TABOR rebate, the temporary income tax cut, and the tiered refund scheme could provide significant financial relief. This is a brief overview of what to anticipate:
Temporary tax rate reduction: By reducing income tax from 4.45% to 4.25%, the total tax burden is reduced.
Refunds are tier-based: The range for single taxpayers is $177 to $565, and the range for joint filers is $354 to $1,130.
In 2025, residents of Colorado will get a substantial return since the state collected $1.4 billion more than permitted under TABOR.
Many households will benefit from the TABOR refund, the temporary tax rate drop, and the six-tier sales tax return system, regardless of whether they receive their rebate through direct deposit, cheque, or prepaid card.
