EN
With tax season behind us, conversations across Colorado are turning to refunds, rebates, and tax cuts. This year, one question is rising above the rest: What happens now that TABOR refunds are off the table?
For the first time since 2020, Colorado taxpayers will not receive a TABOR rebate. That shift has left many wondering whether their tax refunds will shrink, and what it actually means for their bottom line.
Let’s take a closer look. Since TABOR passed in 1992, refunds have been issued only about a third of the time. The unusually large rebates in 2022 and 2023, flat payments of $750 to $800 for single filers and $1,500 for joint filers, were driven by pandemic-era economic volatility.
Those one-time payments created a misleading picture of what TABOR refunds typically look like.
In reality, the long-term trend tells a different story. Over the past 34 years, the state has returned about $12 billion to taxpayers, with nearly $7 billion of that total concentrated in just 2022 and 2023.
Outside of those outlier years, average TABOR refunds have ranged from about $19 to $118, much closer to projected 2025 amounts. While recent rebates were large, they were the exception, not the rule, and are unlikely to continue at that level.
It is also important to understand how TABOR surplus is distributed. Before 2010, excess revenue was often directed to targeted tax credits supporting working families, businesses, or rural health initiatives.
As of 2026, refunds follow the structure set by SB24-228, which determines how money above the TABOR cap is distributed to taxpayers.
First, surplus revenue goes to the Senior Homestead and Disabled Property Tax Exemption, which reimburses local governments for reduced property tax bills for qualifying older adults and veterans. Next, taxpayers receive a temporarily reduced state income tax rate.
Only then does any remaining surplus get returned through a sales tax refund. Because that refund is based on total taxes paid, rather than a share of income, higher-income taxpayers tend to receive larger amounts.
One thing is certain this year: proven refundable tax credits will be missing. The Family Affordability Tax Credit, or FATC, will not be available in 2026 and is expected to remain unavailable through 2028. The Earned Income Tax Credit, or EITC, will still exist at a reduced level, meaning smaller refunds for families who rely on it.
That loss has real consequences. About 331,000 families will miss out on an average FATC benefit of roughly $2,862, money that helps cover housing, child care, and everyday expenses.
The FATC reduced Colorado’s child poverty rate by about 20% on its own. When combined with the EITC and the Child Tax Credit, the total reduction reached 37%.
Without these cash-back credits, hundreds of thousands of Colorado families will see smaller refunds and tighter household budgets.
Despite the attention they receive, TABOR refunds are typically modest and inconsistent, and they are the last step in the surplus distribution process. By contrast, refundable tax credits provide meaningful, reliable support to families and have a proven track record of reducing poverty.
Losing TABOR refunds will not significantly shrink most tax returns. Losing refundable tax credits will.
If Colorado wants to support long-term economic stability and opportunity, the focus should be on permanent, targeted tax credits that invest in families and communities, not refunds that come and go.
