Colorado’s nonpartisan Legislative Council Staff projects that taxpayers will receive no TABOR refund on their 2026 state returns, the ones filed in 2027. Its September forecast says state revenue in the 2025-26 budget year came in $175.9 million under the Referendum C cap, so “the state will not incur an obligation for TABOR refunds.” The table of six-tier sales tax refunds shows $0 in every income bracket for tax year 2026.
A budget year that landed under the cap
TABOR, the Taxpayer’s Bill of Rights, limits how much revenue Colorado can keep, and refunds go out when collections pass that limit. The State Controller certified on September 8, 2026 that revenue for fiscal year 2025-26 fell short of the Referendum C cap by $175.9 million, according to the September 2026 forecast.
A shortfall of that kind means no refund obligation for the year. Tax year 2026 refunds would come from that 2025-26 obligation, and the forecast says there is none. The forecast words the conclusion as a projection, “based on the data available,” which is why it is reported here as one.
The tax site notes that Colorado’s state fiscal year runs from July through June, which is why a refund is named for one year and paid on a return filed in another. The money on a spring 2027 return would trace to the budget year that ended in June 2026.
The result is easy to misread. A projected zero reflects collections that did not clear the cap, so nothing is owed back to taxpayers under TABOR for that year.
Where the money is projected to return
The forecast has refunds coming back a year later. Revenue in fiscal year 2026-27 is projected to exceed the cap by $826.8 million, which after adjustments leaves a refund obligation of $463.7 million. That obligation would pay out on tax year 2027 returns, filed in 2028.
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Later years are larger. The forecast puts the obligation at $490.7 million for fiscal year 2027-28, when revenue is projected $578.7 million over the cap, and $651.5 million for 2028-29. Added together, the three obligations come to about $1.6 billion.
The trend runs upward. The 2028-29 obligation of $651.5 million is about 40 percent above the $463.7 million projected for 2026-27. The first of those years is the one that funds tax year 2027, the first return on which Legislative Council Staff expects a six-tier refund to appear.
For tax year 2027, the six-tier estimates run from $43 for a single filer to $274 for joint filers in the top bracket. A single filer with adjusted gross income up to $57,000 would see $43 and a joint couple $86. The next tier, $57,001 to $117,000, is $58 single and $116 joint.
Above that, the estimates are $67 single and $134 joint for $117,001 to $187,000, then $79 and $158 up to $265,000, and $85 and $170 up to $349,000. At $349,001 and higher, the projection is $137 for a single filer and $274 for joint filers.
How the six-tier refund is paid
The forecast notes that refunds through sales tax refunds or income tax rate reductions are paid to taxpayers when they file their state income tax returns. The state’s tax website says the six-tier refund is generally claimed on the Colorado Individual Income Tax Return, Form DR 0104, even though it is called a sales tax refund.
Joint filers receive twice the single amount. When the refund is $15 or less per taxpayer, each taxpayer gets an equal amount regardless of income, according to the tax site, and above $15 it splits into six levels based on adjusted gross income.
Eligibility is tied to residency and tax paid. Full-year residents qualify, according to the tax site, as do people who died during the tax year if they met filing requirements. People who were incarcerated or committed to the Department of Human Services for 180 days or more during the relevant state fiscal year do not.
Not every TABOR dollar reaches taxpayers as a refund check. A Legislative Council Staff memo dated August 6 says the first refund mechanism is reimbursements to local governments for homestead property tax exemptions. Any remaining amount is refunded through the six-tier sales tax refund.
That order explains why the Table 9 amounts exclude those property tax reimbursements, and any income tax rate reductions. The projected $0 describes the six-tier refund. The homestead exemption reimbursements go to local governments, not to taxpayers on their returns.
The forecast also describes a scheduled income tax rate cut, from 4.40 percent to 4.36 percent in tax year 2029. That change is separate from the refund.
For a retiree budgeting for spring 2027, the working number from Legislative Council Staff is zero for this refund. The amounts for later years are estimates, not payments, and revenue can move before any of them reaches a return.
Planning your Colorado taxes for next spring?
A projected $0 TABOR refund means retirees counting on a Colorado check in spring 2027 may be planning around money the forecast does not show. The tax bill that year will rest on withdrawals, Social Security and deductions instead.
The Retirement Tax & Withdrawal Planner includes the senior deduction, four calculators (provisional income, IRMAA tier, RMD schedule, Roth bracket fill) and the account withdrawal order. The provisional income calculator, for example, shows how much of a Social Security check is taxed before any refund enters the picture.
Get the retiree tax planner and four calculators for the 2027 filing season →
More Financial Reading
- 21 Ways to Stretch a $2,087 Social Security Check
- 15 Places to Find Your Share of the $4.25 Billion States Give Back
- 17 Medicare Money Moves Now That Part D Caps at $2,400
This article was produced with AI assistance and edited for accuracy against the sources linked above.
