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Incentives for Post-Secondary Education

Concerning the creation of incentives against the state income tax for students pursuing post-secondary credentials, and, in connection therewith, making an appropriation.
2024 Regular Session
Fiscal Policy & Taxes
Bill Summary

The bill creates 2 separate a refundable state income tax incentives (incentives) credit (incentive) to encourage enrollment in institutions of higher education. For income tax years commencing on or after January 1, 2024, 2025, but prior to January 1, 2030, 2033, the first incentive is available to an graduate of any eligible student who has matriculated at a public Colorado institution of higher education with a credential required or supported by certain jobs identified by the 2023 Colorado talent pipeline report, defined by the bill as "top jobs", an area technical college, or Colorado mountain college and AIMS community college (institution) in the amount of $250 for the completion of a qualified program less than one year in duration, $500 for the completion of a qualified program between one year and 2 years in duration, $1,500 for graduates of an associate's degree program, and $3,000 for graduates of a bachelor's degree program. equal to the amount paid by or for the benefit of the eligible student in tuition and fees minus any scholarships or grants with respect to the first sixty-five academic credit hours or equivalent accumulated at an institution excluding credits earned through concurrent enrollment, advance placement, the international baccalaureate program, military credits, and any other credits accumulated prior to matriculation at an institution. To qualify, an eligible student must: •Matriculate at the institution within 2 years of completion of high school graduation or an equivalent in Colorado; •Be designated as a degree or credential seeking student for the semester or term for which an incentive is claimed; •Qualify for in-state tuition for the semester or term for which the incentive is claimed; •Complete a free application for federal student aid (FAFSA) or Colorado application for state financial aid (CASFA) for the semester or term for which an incentive is claimed that indicates the student's household has an adjusted gross income that is $90,000 or less; and •Have a grade point average of 2.5 or higher for the semester or term for which the incentive is claimed. The bill also requires an institution, by January 31, 2026, and every January 31 thereafter until 2037, to electronically report each eligible student for any semester or term completed during the prior calendar year in a format prescribed by the executive director of the department of revenue with the student's tax identification number or social security number and the amount of tuition and fees paid minus any scholarship or grants included in the student's 1098-T form for that prior calendar year. The bill requires an institution to provide each eligible student with a statement containing the student's eligibility and incentive amount. The bill also requires the department of higher education on or before June 30, 2027, and each year thereafter until 2037, to submit a report to the joint budget committee and the house of representatives and senate education committees, that includes amongst other data, for each institution, the average percentage of state and institutional financial aid allocated to the resident student population who have a family income of $90,000 or less in the years of 2022, 2023, and 2024, and each year thereafter. For the 2024-25 state fiscal year, the bill appropriates $285,006 from the general fund to the department of revenue for use by the taxation business group, $3,875 to the department of personnel for use by the division of central services, and $123,772 to the department of higher education for use by the Colorado commission on higher education and higher education special purpose programs. For income tax years commencing on or after January 1, 2026, but prior to January 1, 2030, the second incentive is available to an eligible transfer student attending a 4-year Colorado institution of higher education, in the amount of $50 per credit hour transferred from either a 2-year Colorado institution of higher education or earned while under certain enrollment status in high school. The incentive is capped at 60 credit hours or $3,000 and may only be awarded after the student completes at least 15 credits at the 4-year Colorado institution of higher education. Notwithstanding the incentive amounts otherwise allowed for both incentives, if the revenue forecast prepared by either legislative council staff or the office of state planning and budgeting in June of any income tax year for which an incentive is allowed projects that the amount of excess state revenues for the state fiscal year that ends during the income tax year will be:

  • At least $500 million but no more than $750 million, the amount of the incentive allowed is reduced by fifty percent for that income tax year.
  • Less than $500 million, the incentive is not allowed for that income tax year.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)




Bill Text

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The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details