Older Coloradans will get up to $1,000 in tax credits under legislation that Gov. Jared Polis signed on Wednesday.

House Bill 22-1205 creates a refundable income tax credit totaling $100 million. Sponsors say it would boost older residents’ income amid rising housing costs.

“Coloradans are feeling the pressures of rising costs from pandemic-induced inflation, supply chain challenges and rising gas prices, so we made saving people money our top priority this session,” Rep. Chris Kennedy, D-Lakewood, who sponsored the bill, said in a news release. 

“This year we took important steps to alleviate the pressure many families are facing due to pandemic-induced inflation and the rising cost of living, and this new law is a key component of that progress,” added Senator Chris Hansen, D-Denver, who is also a sponsor.  

The temporary tax credit in House Bill 22-1205 applies to individuals 65 and older who have not claimed a homestead property tax exemption for the 2022 property tax year. To be eligible, their income must fall below $75,000. Under the proposal, eligible Coloradans may claim up to $1,000 in tax credit, depending on their income level. A household can only claim a total of $1,000.

State budget analysts earlier estimated the legislation would apply to roughly 155,000 residents, 80% of whom are expected to file returns and claim the proposed credit. If enacted, the measure will cost the state $100 million over two fiscal years, starting in FY 2021-2022, and reduce the Taxpayer’s Bill of Rights refund by the same amount.   

The bill is among several measures that their Democratic proponents say will offer economic relief to residents amid skyrocketing prices of commodities and soaring inflation. Republican critics view some of the proposals as a cynical ploy to court voters in an election year.

Unlike most of those proposals, however, HB 22-1205 attracted significant bipartisan support. The House approved the measure on a 51-12 vote.   

The existing homestead exemption, which reduces the value of a home for property taxation purposes, is another benefit that applies to older adults, but to be eligible, they must have occupied their home as a primary residence for at least 10 years. HB 22-1205 benefits older residents who rent or haven’t owned their homes long enough to qualify for the homestead exemption.