**CO HB24-1340 - Incentives for Post-Secondary Education****Note – This is not legal advice, based on information gathered
Summary: *** **2025 – 2033 Refundable state income tax credit for student who matriculate to any public Colorado institution of Higher education (including technical college) **
- **And whose household adjusted gross income is $90,000 or less **
- **And completes the FAFSA and CO Appl for State Financial Assistance CASFA **
- **Refundable tax credit in the amount equal to the amount paid by or for the benefit of the eligible student in tuition and fees **
- For the first 65 academic credit hours (excluding concurrent enrollment, advance placement, international baccalaureate, military credits or any other credits accumulated prior to matriculation at an institution)
- **Minus any scholarships or grants **
- With the institutional submitting information annually in January as to…
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- the amount of tuition and fees minus scholarships or grants for the previous calendar year
- **student’s eligibility **
- and incentive amount
**(Institutional information goes to the Dept Higher Ed and then forwards to the Dept of Revenue **
- **Also, an average financial aid percentage requirement to support student HH of $90,000 or less ****Bottom line: Scholarships to Colorado youth with Household incomes of $90,000 or less will offset the state investment for the first 65 credit hours, not increase the amount available to the student. The Colorado refundable tax credit will be reduced by the exact amount of the scholarship that applies to tuition and fees for the first 65 credit hours
Updating Scholarship Programs: ****If you don’t want your scholarship funds to offset the refundable state tax credit, you have three options, or a combination: **1. Provide scholarships to students with incomes over $90,000 who are ineligible for the refundable tax credit.
**This is not a solution for those who target needs-based, low-income student/household support, but may apply to some scholarships based on other criteria.
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2. Provide the scholarship for tuition and fees excluding the first 65 credit hours.
**The refundable tax credit applies only to the first 65 credit hours once enrolled in higher education.
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3. Provide the scholarship for items excluding tuition and fees for the first 65 credit hours.
This could be a good option for scholarship programs targeting needs-based, low-income students as data shows that it is non-tuition expenses that most often challenge these students, including books and supplies, technology, optional student opportunities (ex: gym membership, Greek life), food and housing, transportation, etc.
**Starting with 66 credit units, scholarship funds can be applied to tuition and fees. **
**Scholarship funds can still be passed through higher education institutions for these expenses. ****Scholarship providers may also consider support to students/families to claim the refundable tax credit. If it is not claimed, the funds are lost to the student/family. This is particularly important as the tax credit is refundable, meaning that even if you don’t pay taxes, you can submit a tax filing and receive these funds.**
Click Here for a link to the state website with additional information.
