Amendment 66 would raise an estimated $950 million in its first year. The calculator below will show you how much this investment in Colorado’s future will affect your taxes.
This calculator uses an estimate of TOTAL INCOME to figure out your tax contribution. Know your TAXABLE INCOME (Line 18 of your Colorado Individual Income Tax Return? Click here.) Some news articles have been conflating “TOTAL INCOME” and “TAXABLE INCOME” when explaining Amendment 66. Click here for an explanation of the difference.
This tax calculator is for general information only and does not represent personal
This tax calculator is for general information only and does not represent personal tax advice either expressed or implied. The calculator is an approximation and not an exact measure.
It is difficult to know exactly how much each individual will pay because every taxpayer claims different deductions. The calculations used assume an average taxpayer. The calculator automatically converts adjusted gross income to taxable income using Colorado’s aggregate tax statistics.
The proposal moves from the current single tax rate on individual income of 4.63% to a two-step tax structure of 5.0% and 5.9% based on taxable income above and below $75,000.
Calculating the additional taxes an individual with a particular income pays under the new tax structure involves three steps.
Step 1: Convert Adjusted Gross Income (AGI) to Federal Taxable Income (FTI). This is done because state individual income tax rates are applied to an individual’s taxable income amount, which is always smaller than adjusted gross income because deductions are subtracted out. The calculator utilizes the Colorado’s Department of Revenue’s 2012 Tax Profile and Expenditure Report to breakdown adjusted gross income and federal taxable income by income categories. We divide federal taxable income by adjusted gross income to get a FTI/AGI ratio for each income group. This ratio is used to convert AGI to FTI.
Step 2: Calculate the difference between the old rate and the new rate. Taxable income up to $75,000 will see an increase in rate of 0.37% and taxable income above $75,000 will see an increase in rate of 1.27%. (5.0% – 4.63% = 0.37% and 5.9% – 4.63% = 1.27%).
Step 3: Multiply the difference in rates by an individual’s federal taxable income, remembering to multiply the first $75,000 in taxable income by 0.37% and income above $75,000 by 1.27%.
Colorado Tax Profile and Expenditure Report 2012
(Table 12) page 84