Colorado TABOR Rebate Amount Directly In Your Wallet: What You Need To Know

Good news for Colorado residents: 2025 will bring another round of TABOR refunds. These refunds are made possible by the Taxpayer’s Bill of Rights (TABOR), which limits the amount of revenue the state can collect and requires any excess to be refunded to taxpayers.

Here’s a breakdown of what to expect from the 2025 TABOR rebate and how much could end up in your wallet.

The TABOR Rebate Overview

The state of Colorado collected $1.4 billion more than the TABOR limit for the 2023-24 fiscal year. In addition, $289 million that was under-refunded previously will also be included in the 2025 refunds.

This means taxpayers are set to receive a significant rebate, though future refunds are uncertain as state budgets could tighten in the coming years.

How Will You Receive Your Refund?

For the 2025 refunds, there are three possible ways that Coloradans will get their TABOR rebates:

1. Direct Deposits: For taxpayers who opt for direct deposit when filing their taxes, the refund will be deposited directly into their bank accounts.
2. Paper Checks: Similar to previous years, taxpayers who haven’t set up direct deposit will receive a check in the mail.
3. Prepaid Debit Cards: Another option is receiving the rebate through prepaid debit cards, which can be used like cash.

These methods provide flexibility, making it easier for residents to access their refunds.

Temporary Income Tax Rate Reduction

As part of the TABOR refund process in 2025, taxpayers will also benefit from a temporary reduction in the state’s income tax rate.

The tax rate will decrease from 4.45% to 4.25%, offering additional savings for residents. This reduction will be automatically applied when filing your income tax return for the 2025 tax year, giving Coloradans a bit more money in their pockets.

Six-Tier Sales Tax Refund System

One of the notable changes for 2025 is the introduction of a six-tier sales tax refund system. This system is designed to ensure that refunds are distributed based on taxpayers’ adjusted gross income (AGI).

This approach ensures fairness, as higher-income earners will receive higher refunds, while lower-income taxpayers still get a meaningful amount. Here’s how the refunds will be distributed:

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

This tiered system ensures that taxpayers from all income brackets receive a fair share of the refund, with amounts varying depending on how much they earn.

Property Tax Exemption Reimbursement

In addition to the general refunds, the state is also focusing on providing financial relief through the reimbursement of local governments for property tax exemptions.

This initiative is particularly beneficial for older adults, veterans with disabilities, and Gold Star spouses, ensuring that those in need get the assistance they deserve.

This aspect of the rebate system highlights the state’s commitment to supporting its most vulnerable populations.

What Can You Expect in Your Wallet?

The 2025 TABOR rebate, along with the temporary income tax reduction and the tiered refund system, could result in substantial financial relief for many Colorado residents. Here’s a quick summary of what to expect:

• Temporary tax rate reduction: Income tax drops from 4.45% to 4.25%, which lowers the overall tax bill.
• Tiered refunds: Single filers can expect refunds ranging from $177 to $565, while joint filers will see refunds between $354 and $1,130.

While this might not completely offset rising costs for all residents, it provides a meaningful boost to household finances.

With Colorado collecting $1.4 billion more than allowed under TABOR, residents are set to receive a sizable refund in 2025.

Whether you receive your rebate via direct deposit, check, or prepaid card, the TABOR refund, along with the temporary tax rate reduction and six-tier sales tax refund system, will help many households manage their expenses.

While future refunds are uncertain due to potential budget constraints, 2025 is shaping up to be a year where Colorado taxpayers get some financial relief.

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