Colorado offers some very notable tax benefits for retirees, making it an attractive destination for those looking to enjoy their retirement years and still live in comfort. The following overview shows some of the key tax benefits available to retirees living in Colorado:
- Social Security Benefits: Colorado does not tax Social Security benefits. Retirees can receive their Social Security income without any state income tax liability, providing a significant financial advantage.
- Pension and Retirement Income: The state offers favorable treatment for pension and retirement income. Most retirement income, such as distributions from qualified retirement plans (like 401(k) or IRA), is exempt from state income tax for individuals who are at least 55 years old. This includes income from government pensions, military retirement, and private retirement plans.
- Property Tax Exemptions: Colorado also provides property tax exemptions for qualifying seniors. The Senior Property Tax Exemption allows individuals who are 65 years or older and who have owned their primary residence for at least 10 years to claim a portion of their property value as exempt from property tax. This exemption helps reduce the property tax burden for eligible retirees.
- Homestead Exemption: A Homestead Exemption for seniors and disabled individuals is available as well. This exemption reduces the assessed value of a qualifying individual’s primary residence by a specific amount, leading to lower property taxes.
- No Estate Tax: Finally, it’s worth pointing out that Colorado does not have an estate tax. This means that retirees can pass on their assets to their heirs without incurring state-level estate taxes.
For more information regarding retirement financial opportunities, talk to AACU representatives at a credit union near me in Parker. AACU is a full-service financial institution that believes in providing customized solutions to help people achieve their financial goals.