Colorado 529 tax deduction in 2026
Colorado's cap runs to five figures for each child and moves every year with the price of a state university.
Colorado tax saved on this contribution
$1,320
4.4 % of what you put in comes back on your 2026 return.
| Subtracted from state income | $30,000 |
| Your state marginal rate | 4.40 % |
| Cap that applies this year | $52,400 |
| Back per $1,000 contributed | $44 |
Colorado: Subtraction for contributions to CollegeInvest plans, capped per beneficiary at $26,200 (single) / $39,200 (joint, applied jointly) for 2026 ($25,400 / $38,100 for 2025), combined with ABLE contributions for the same beneficiary, and limited to Colorado taxable income; caps indexed yearly to in-state tuition plus room and board. Read on 2026-10-19. No federal deduction exists for 529 contributions.
| Taxable income | Marginal rate | Tax saved |
|---|---|---|
| $50,000 | 4.40 % | $1,320 |
| $100,000 | 4.40 % | $1,320 |
| $200,000 | 4.40 % | $1,320 |
| $400,000 | 4.40 % | $1,320 |
Worked out by Radif Partners · How we calculate · Colorado rule read on October 19, 2026, brackets of tax year 2025 · not tax advice
Colorado lets each taxpayer subtract contributions to CollegeInvest plans up to $26,200 per beneficiary in 2026, or $39,200 per beneficiary on a joint return, according to CollegeInvest; the 2025 figures were $25,400 and $38,100. The cap follows in-state tuition plus room and board, is shared with ABLE contributions for the same child, and cannot exceed Colorado taxable income. At a flat 4.4 %, a grandfather at $95,000 who gives $30,000 split between two grandchildren deducts every dollar and saves $1,320. Only CollegeInvest plans count. Colorado's definition of qualified expenses is narrower than the federal one: K-12 costs, student loan payments, rollovers to an out-of-state plan and rollovers to a Roth IRA are all non-qualifying, and the contribution basis of such a withdrawal is added back to income. The 2026 rate was not yet published by the Department of Revenue when this page was written.
| Benefit for contributions | Deduction |
|---|---|
| Cap | $26,200 single, $39,200 joint per child, per taxpayer |
| Another state’s plan counts | No, in-state plan only |
| State plans (official names, no recommendation) | Direct Portfolio College Savings Plan, Smart Choice College Savings Plan, Stable Value Plus College Savings Plan, Scholars Choice College Savings Plan (advisor-sold) |
| Account balance limit | $500,000 |
| K-12 withdrawals qualified for state tax | No |
| 529 to Roth IRA rollover qualified | No |
| Student loan payments qualified | No |
| Add-back on a rollover to another state’s plan | Yes |
A cap tied to what college costs
Instead of a fixed dollar figure set by statute, Colorado indexes its limit each year to in-state tuition plus room and board. For 2026 the CollegeInvest tax page lists $26,200 per beneficiary for a single filer and $39,200 for a joint return, up from $25,400 and $38,100 for 2025. The Department of Revenue's own topic sheet, revised in March 2025, stops at the 2025 figures, so the 2026 amounts rest on the plan site for now.
The joint figure is applied jointly, to both spouses together. The single figure applies to each taxpayer who contributes, so a grandparent filing alone has a full $26,200 for each grandchild.
Colorado room for several grandchildren
Colorado tax saved on this contribution
$1,320
| Subtracted from state income | $30,000 |
| Your state marginal rate | 4.40 % |
| Cap that applies this year | $52,400 |
| Back per $1,000 contributed | $44 |
Three things that shrink it
Your own taxable income
The subtraction cannot push Colorado taxable income below zero. A retiree with $18,000 of taxable income who deposits $25,000 for one grandchild subtracts only $18,000 and saves $792. No carryforward was found in the DOR text, so the rest earns nothing later.
ABLE contributions for the same child
Money put into an ABLE account for a beneficiary uses the same per-child cap. A family funding both for one child shares one limit.
The joint cap for a single large gift
A couple at $210,000 who put $45,000 into one child's account deduct $39,200 and save $1,725. Had they sent part of it after New Year, the second part would have met a fresh cap in the next tax year.
CollegeInvest only
Colorado gives no subtraction for another state's plan. The four CollegeInvest programs listed in the fact table all qualify, Scholars Choice included. A rollover in from another state's plan has its own rules in the DOR sheet.
The narrow list of qualified uses
The DOR topic sheet on the CollegeInvest subtraction excludes elementary and secondary costs from qualified expenses for Colorado. It also lists education loan repayments, rollovers to an out-of-state 529 and rollovers to a Roth IRA as non-qualifying. Each of these must be added to Colorado income, using the basis figure in box 3 of Form 1099-Q. A K-12 payment that is tax-free federally up to $20,000 still costs a Colorado family the deductions on that money: $24,000 added back for a couple at $120,000 is about $1,056 of state tax.
Colorado add-back on a non-qualifying use
Colorado tax if the deductions come back
$1,056
| Amount added back | $24,000 |
| Your state marginal rate | 4.40 % |
The 2025 federal law's changes are not yet covered by any Colorado tax guidance that was found. CollegeInvest mentions a new law extending 529 uses to workforce training and certifications, but its Colorado tax effect was not confirmed on an official page. The K-12 guide explains the federal side.
Rate and balance limit
The figures on this page use the 4.4 % flat rate of 2025, the last year the DOR's income tax guide lists. A temporary TABOR reduction has lowered the rate in some past years. CollegeInvest stops contributions when a beneficiary's accounts reach $500,000.