TABOR Refunds, New Credits, and What They Mean for Your Personal and Business Finances
As summer hits full swing, many Coloradans are finding more than just heat in the mailbox—TABOR refunds and state tax credit notices are landing now, and they’re raising big questions.
Combined with inflation pressures, insurance cost hikes, and evolving legislation, these tax changes are influencing how people spend, save, and invest—especially business owners and high-income households.
This makes mid-July a crucial time to revisit your financial strategy:
TABOR refund checks are arriving—what should you actually do with that money?
Q3 tax estimates are coming due—are you overpaying or missing new credits?
2025 state tax reform proposals are taking shape—are you positioned to adapt?
Let’s break down what’s changing—and how to respond strategically.
What Is TABOR, and Why Does It Matter?
The Taxpayer’s Bill of Rights (TABOR) limits how much revenue the State of Colorado can retain. When collections exceed this limit, the surplus is returned to taxpayers through:
Flat refund checks (typically $750–$1,500 depending on family size)
Temporary income tax rate reductions (e.g., from 4.55% to 4.4%)
These returns are welcome, but they’re not guaranteed every year—and they shouldn’t be treated as “free money.” Strategic planning can turn a short-term benefit into long-term impact.
How to Use Your TABOR Refund Strategically
Here are a few smart ways we’re helping clients make the most of their refunds:
Offset inflation-sensitive costs – Insurance, utilities, and other core expenses are climbing. Use refunds to create buffer room in your budget.
Fund future priorities – Whether it’s a Roth IRA, 529 college savings plan, or HSA, now’s a great time to invest for the future.
Build business flexibility – Owners can use refunds to build working capital, prepay expenses, or offset rising overhead before year-end.
State Tax Credits You Might Be Missing
Colorado has also expanded several state-level tax credits—many of which can go unnoticed if you’re only focused on federal filings.
🔋 Clean Energy Credits
Tax incentives for installing solar panels, purchasing EVs, or upgrading insulation or HVAC
May also benefit business owners upgrading commercial property or fleets
👶 Child & Dependent Care Credit
Offers relief for families paying for daycare, summer camp, or in-home care
Can supplement the federal credit with state-specific benefits
💼 Business Tax Credits
Credits for offering group health insurance or participating in Colorado’s new paid family leave program
Retirement plan startup credits via SECURE 2.0 also apply (federal-level, but integrated into state compliance and planning)
Who Should Pay Attention Now?
These developments affect more than just tax season—they shape decisions throughout the year. We’re seeing strong impacts on:
Business Owners – Planning quarterly payments, maximizing deductions, and reviewing entity structure
Pre-Retirees – Coordinating investment income, Social Security, and RMDs to minimize tax exposure
High-Income Professionals – Staying below key thresholds for credits or Medicare surcharges
Young Families – Strategizing for care expenses, education savings, and maximizing state support
If you’re unsure which credits apply—or how your refund fits into your plan—a mid-year review can offer clarity and confidence.
📞 Want to get ahead of Q3 tax decisions?
Let’s talk. We’ll walk through how Colorado’s evolving tax rules could work to your advantage—whether you're running a business, raising a family, or planning your next chapter.
Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.