The Colorado state 2021 legislative session convened on January 13 for three days and is currently on a temporary recess. The Colorado General Assembly is expected to reconvene on February 16 and tackle many of the issues left on the table last year amid the pandemic.
HB21-1002 Reductions Certain Taxpayers' Income Tax Liability
Concerning reductions to certain taxpayers' state income tax liability related to state tax law changes made in 2020, and, in connection therewith, making an appropriation.
Sections 1 and 3 of the bill restore, over time, certain business deductions to federal taxable income that were disallowed in Colorado by operation of a department of revenue rule and by House Bill 20-1420. The specific deductions are related to net operating losses, the application of the federal excess business loss rules, interest expenses, and qualified improvement property.
The earned income tax credit is equal to a percentage of the federal earned income tax credit. Section 2 allows taxpayers filing with an individual taxpayer identification number to claim the earned income tax credit for income tax years commencing on or after January 1, 2020.
These changes help Colorado tax laws better agree with federal law and help limit the exposure of the department of revenue.
SB21-001 Modify COVID-19 Relief Programs For Small Business
Concerning modifications to programs enacted to provide relief to certain businesses impacted by severe capacity restrictions due to the COVID-19 pandemic.
The bill moves the COVID-19 relief program for minority-owned businesses from the minority business office to the Colorado office of economic development and expands the scope of the program to allow relief payments, grants, loans, and technical assistance and consulting support to small businesses disproportionately impacted by the COVID-19 pandemic.
Additionally, the bill extends the deadlines for allocating and distributing relief payments under the small business relief program.
