Colorado Tabor Sales Tax Refund modified AGI program defect

[Ellen Knous Cole]

When a taxpayer has some nontaxable social security benefits, and is contributing to a traditional IRA, the "nontaxable social security income" addback to arrive at Modified AGI is adding back the ENTIRE social security benefits, not just the nontaxable portion. This results in Modified AGI being overstated, and potentially incorrectly jumping the taxpayer in the next level of Tabor State Sales Tax Refund. Line 32 of Form 104 is where you'll see this defect, when someone has a deductible contribution to an IRA and has social security benefits, some of which are taxable.