Colorado Tax Refund 2024: $400-$800 Check for Many Residents

Are you one of them?

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Key points

• Colorado residents may be getting a nice payday in the coming months.
• Single tax filers could receive $400 back, while joint filers could get an $800 payday.

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These days, many people are struggling with rising living costs. And Coloradans are no exception.

Although the state has recovered nicely from the economic blow of the pandemic, living costs in the state have risen since last year, as is the case throughout the country. Meanwhile, in recent years, the cost of housing in popular metro areas like Denver has soared, putting even more of a strain on residents' budgets.

But there's some relief in sight. This summer, Colorado residents can anticipate a nice payday courtesy of the state. And that could help many people shore up their finances at a time when inflation is raging and forcing consumers to rack up credit card debt just to stay afloat.

A nice payday looms

This week, Colorado Governor Jared Polis announced that residents of the state will receive a $400 rebate come summertime. Single tax filers will receive $400, while married folks filing jointly will receive $800.

The rebate is available to anyone who files a 2021 state tax return by May 31, 2022 and is a full-time resident of the state. All told, that means over 3 million people could be in line for that money, which should arrive in the mail in August or September. And those eligible for a rebate will get it automatically.

Colorado is experiencing the fifth-fastest economic rebound in the country and has recovered more than 100% of jobs lost during the pandemic. Now, the state's unemployment rate sits at 3.7%, which is the lowest level since the pandemic began. Due to the state's strong economic performance, there's a surplus of funds available that will allow for the $400 or $800 payments going out in a few months.

An imperfect system?

On the one hand, the fact that Colorado residents are getting a payday due to a budget surplus is a good thing. That empowers individuals to spend that cash as they want or need. On the other hand, giving that money out to the masses means Colorado can't invest that money in things like schools, infrastructure, and other projects that might improve residents' quality of life.

To be clear, the payments going out this summer aren't being sent on a whim. Rather, they're due to the Taxpayer’s Bill of Rights, or TABOR, an amendment to the Colorado Constitution enacted by voters in 1992 that limits the amount of revenue the state is allowed to retain and spend. But Coloradans are divided on whether it's best for the state to return excess money to residents or to spend it on infrastructure, education, and social programs.

Not the first state to refund a surplus

Colorado isn't the only state to be making plans to issue a rebate to residents this year. As a result of a comparable surplus, about 4.3 million Indiana residents will be in line for a $125 payment this year as well.

At a time when so many people are struggling with bills, these windfalls may be celebrated. But it definitely raises the question of whether giving out these small paydays is a good thing or not.