Colorado Form DR 0104AD is the schedule you attach to your state income tax return to subtract specific types of income that Colorado doesn’t tax. The form lists 21 possible subtractions, and the total you calculate on line 22 transfers to line 11 of Form DR 0104, reducing the income Colorado taxes at its flat 4.4 percent rate. You can download the current version from the Colorado Department of Revenue website or complete it through the state’s free Revenue Online portal at tax.colorado.gov.
What to Gather Before You Start
The DR 0104AD pulls numbers from your completed federal return, so finish federal Form 1040 first. Have these within reach:
- Federal Form 1040. You’ll need taxable Social Security from line 6b, pension and annuity income from lines 5a and 5b, and federal taxable income from line 15.
- SSA-1099 and any 1099-R forms, which confirm exact amounts for Social Security, pension, and annuity distributions.
- CollegeInvest or Colorado ABLE account statements showing contribution totals for the tax year.
- Records of charitable contributions, relevant only if you took the federal standard deduction.
- Brokerage or closing statements if you sold qualifying Colorado agricultural land held at least five years.
- Your Social Security number or ITIN to link the schedule to your main return.
Each line on the form corresponds to a specific Colorado subtraction. Fill in only the lines that apply to you and leave the rest blank.
Walking Through the Subtractions
Most taxpayers use only a handful of the 21 lines. The ones below come up most often, in the order they appear.
Line 1: State Income Tax Refund
If you received a Colorado income tax refund last year and reported it as income on your federal return, subtract it here. This keeps Colorado from taxing money the state already returned to you.
Line 2: U.S. Government Interest
Interest from U.S. Treasury bonds, notes, bills, and savings bonds is taxable federally but exempt from Colorado income tax. Enter the amount if it’s included in your federal taxable income. The subtraction also covers income from mutual funds that invest exclusively in exempt U.S. obligations; funds holding a mix require you to subtract only the exempt portion. Interest from government-sponsored enterprises such as Fannie Mae does not qualify unless specifically exempted under federal law.
Lines 3–6: Social Security and Pension or Annuity
Colorado lets you subtract Social Security benefits and qualifying pension or annuity income that you reported as taxable federally, up to age-based caps:
- Ages 55 through 64: up to $20,000 of combined qualifying pension, annuity, or Social Security income.
- Age 65 and older: up to $24,000.
- Under age 55: generally not eligible, unless the income is a death benefit received as a surviving spouse or dependent.
The cap applies to the combined total per taxpayer, not per income source. On a joint return, each spouse uses their own lines (3 and 4 for the primary taxpayer, 5 and 6 for the spouse), each with a cap based on that spouse’s age.
Lines 7–8: Military Retirement
Retired servicemembers under 55 at the end of the tax year claim a military-specific subtraction on line 7. For tax year 2025, the limit for under-55 retirees is $15,000 of military retirement benefits included in federal taxable income. If you’re 55 or older, use the regular pension and annuity subtraction on line 4 (or line 6 for a spouse), which can be worth up to $20,000 or $24,000 depending on age.
Line 9: Colorado Agricultural Land Capital Gain
This applies to capital gains from selling real property classified as agricultural land for Colorado property tax purposes. You must have owned the property without interruption for at least five years before the sale, and the gain must be in your federal taxable income. The maximum subtraction is $100,000. Since 2022, gains from tangible personal property no longer qualify.
Lines 10–11: CollegeInvest and ABLE Contributions
Contributions to a CollegeInvest 529 education savings plan or a Colorado ABLE account are subtractable up to annual per-beneficiary limits. For tax year 2025, CollegeInvest limits are $25,400 per beneficiary for single filers and $38,100 for joint filers. These limits adjust each year based on average college costs.
Line 12: Charitable Contributions
This subtraction is available only if you claimed the standard deduction on your federal return. If you itemized, your contributions already reduced your federal taxable income and cannot be subtracted again here. Standard-deduction filers who made qualifying donations enter those amounts on line 12. Keep receipts, and use IRS Form 8283 for larger noncash contributions.
Other Lines: PERA/DPSRS, Railroad, FAMLI
Line 14 covers contributions to the Public Employees’ Retirement Association (PERA) or the Denver Public Schools Retirement System (DPSRS). Line 15 handles railroad retirement benefits. Line 19 covers Family and Medical Leave Insurance (FAMLI) benefits received. Line 20 is the catch-all for qualifying subtractions without a dedicated line. Eligibility rules for each appear in the DR 0104 Book.
Subtractions That No Longer Apply
Don’t look for these on the current form. The medical savings account subtraction and the employer contribution to medical savings account subtraction were both eliminated starting with tax year 2025. The wildfire mitigation subtraction ended after tax year 2024; Colorado replaced it with an income tax credit for tax years 2023 through 2027, claimed on a different form.
Totaling and Transferring to the DR 0104
After filling in every line that applies, add lines 1 through 21 and enter the sum on line 22. Transfer that number to line 11 of your DR 0104. The transfer is what actually reduces the income Colorado taxes. If you skip it or enter the wrong number, the Department of Revenue will calculate tax on your full federal taxable income and bill you for the difference.
Check your math. The Department compares the figures on your DR 0104AD against federal records and third-party reports such as 1099s and W-2s, and a mismatch is the fastest way to trigger a notice or delay a refund.
How to Submit the Form
Electronic Filing
Revenue Online at tax.colorado.gov is free and doesn’t require an account to file a return. The system handles the DR 0104AD as part of your return, so there’s no separate attachment step. Certified third-party tax software also supports the DR 0104AD and transmits it automatically with your DR 0104.
Paper Filing
Print the DR 0104AD and staple it directly behind your DR 0104. The mailing address depends on your balance:
- Without a payment (refund or zero balance): Colorado Department of Revenue, Denver, CO 80261-0005.
- With a payment enclosed: Colorado Department of Revenue, Denver, CO 80261-0006.
Returns are due April 15 of the year following the tax year. An extension moves the paperwork deadline to October 15, but any tax owed is still due by April 15.
After You File
Electronic returns with direct deposit typically produce a refund within three to five weeks. Paper returns can take up to three months to process and mail a check. Direct deposit is the fastest option regardless of how you file.
Check refund status through Revenue Online using your Social Security number or ITIN and the refund amount from your return. The tracker shows the same information Department staff see. If the Department finds an error on your DR 0104AD, it will mail a notice explaining the issue, the corrected amounts, and any change to your refund or balance. Electronic filers get a confirmation number at submission as proof the return was received.
Penalties and Recordkeeping
Filing late or underpaying triggers a penalty of 5 percent of the unpaid tax plus an additional half percent for each month or partial month the balance remains unpaid, capped at 12 percent. The minimum penalty is $5. Unpaid tax accrues interest at 11 percent annually, or 8 percent for taxpayers who qualify for the discounted rate.
Claiming a subtraction you don’t qualify for, or exceeding a statutory cap, can result in the Department disallowing the subtraction entirely and billing you for the difference plus interest. Keep supporting documents (1099s, account statements, receipts) for at least three years after filing. For complex returns, holding them six or seven years is a reasonable precaution given the longer lookback periods that can apply when income is underreported.