Colorado Gov. Jared Polis recently signed a landmark bill to make higher education more accessible in the Centennial State. Proponents say the new law, the Colorado Promise: Two Free Years of College Expanded, will help reduce financial barriers for many students and families.
In a release, Polis pointed out that under Colorado Promise, any public four-year college, community college, or trade school will be free for more Coloradans.
“This will strengthen Colorado’s workforce, provide new pathways for students to gain in-demand skills, and save Coloradans thousands of dollars — helping ensure that higher education is affordable for everyone,” Polis stated.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The initiative, which starts this fall, is designed to help more students from families with lower and middle incomes pursue higher education without the burden of significant debt.
Here’s more of what you need to know.
Is college tuition free in Colorado?
The Colorado Promise program will offer two years of tuition and fees at any public four-year college, community college, or trade school in Colorado for students whose families earn less than $90,000 annually.
According to the Colorado Department of Education website, “the tax credit covers up to the first 65 credits a student takes, not counting any concurrent enrollment, AP/IB, military credit, or credit for prior learning.”
- To be eligible for this program, students must qualify for in-state tuition and complete either the Free Application for Federal Student Aid (FAFSA) or the Colorado Application for State Financial Aid (CASFA).
- Additionally, they must enroll in college within two years of graduating high school to pursue a degree and have a semester minimum 2.5 grade point average (GPA).
Qualifying students initially pay tuition out-of-pocket and the reimbursement is for tuition and fees after accounting for any scholarships or grants. However, eligible students can claim reimbursement during tax season through a refundable income tax credit.
- For example, students starting their education in the fall of 2024 will claim their tax credit on their 2025 returns, filed in early 2026.
- That means families cover tuition upfront, with reimbursement following the subsequent tax year.
The lag between paying tuition and receiving the tax credit could be challenging for some. Still, long-term benefits of reducing student debt and enhancing access to education are potentially substantial.
Note: According to state officials, the program specifics may vary depending on the requirements of each educational institution.
TABOR Colorado
Funding for the free tuition initiative involves reallocating state tax revenues to fund the educational costs for eligible students. The program leverages funds collected above the Taxpayer’s Bill of Rights (TABOR) cap. (TABOR requires that excess revenue be returned to Colorado taxpayers.)
TABOR payments/refunds are based on whether the state exceeds a surplus revenue threshold. For example, as Kiplinger has reported, 2024 TABOR payments will be flat or equal across the board. Current estimates are that single filers could receive about $847 and joint filers, $1,694.
Other Colorado tax relief
In addition to the Colorado Promise initiative, Gov. Polis recently signed other tax bills designed to support families and improve economic conditions. Meanwhile, Coloradans will also have the opportunity to vote on property tax proposals in November.
Two proposed property tax measures on the state ballot would provide tax relief to homeowners facing soaring property values.
Related
-
Original Medicare vs Medicare Advantage Quiz: Which is Right for You?Quiz Take this quick quiz to discover your "Medicare Personality Type" and learn whether you are a Traditionalist, or a Bundler.
-
Ask the Editor: Capital Gains and Tax PlanningAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on capital gains tax rates and end-of-year tax planning
-
Time Is Running Out to Make the Best Tax Moves for 2025Don't wait until January — investors, including those with a high net worth, can snag big tax savings for 2025 (and 2026) with these strategies.
-
Are You Middle-Class? Here's The Most Tax-Friendly State For Your FamilyTax Tips We found the state with no income tax, low property tax bills, and exemptions on groceries and medicine.
-
Social Security Benefits Quiz : Do You Know the IRS Tax Rules?Quiz Social Security benefits often come with confusing IRS tax rules that can trip up financially savvy retirees and near-retirees.
-
How Are I Bonds Taxed? 8 Common Situations to KnowBonds Series I U.S. savings bonds are a popular investment, but the federal income tax consequences are anything but straightforward.
-
Capital Gains Tax Quiz: How Well Do You Really Know IRS Investment Tax Rules?Quiz Take our capital gains tax quiz to test your investment taxes knowledge. Learn about loss rules, holding periods, and tax incentives that could impact your savings.
-
6 Tax Reasons to Convert Your IRA to a Roth (and When You Shouldn't)Retirement Taxes Here’s how converting your traditional retirement account to a Roth IRA can boost your nest egg — but avoid these costly scenarios.
-
Could Tax Savings Make a 50-Year Mortgage Worth It?Buying a Home The 50-year mortgage proposal by Trump aims to address the housing affordability crisis with lower monthly mortgage payments. But what does that mean for your taxes?
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
An HSA Sounds Great for Taxes: Here’s Why It Might Not Be Right for YouHealth Savings Even with the promise of ‘triple tax benefits,’ a health savings account might not be the best health plan option for everyone.
