Under the Taxpayer’s Bill of Rights (TABOR) — a constitutional measure enacted in 1992 in Colorado — the state must refund any revenue collected above a spending cap unless voters approve retaining it. Wikipedia+3jeffco.us+3tax.colorado.gov+3
Earlier this month the state controller confirmed Colorado collected $296.1 million above that spending cap. That triggers a refund for taxpayers.
What Amounts You Can Expect
Refunds for 2025 are set to be smaller than in prior years, reflecting the lower surplus.
- Payments will range from $20 to $62 per individual, depending on income level.
- These refunds will be issued when taxpayers file for the 2025 tax year — generally in early 2026.
- The Colorado Department of Revenue (DOR) says eligible taxpayers don’t need to do anything extra; the refund will be processed automatically.
Why the Amounts Are Reduced
Several factors explain why the refund is lower this year:
- Slower job and wage growth in key sectors.
- Declines in corporate-income tax collections tied to national trade policy shifts.
- Rising state spending (education, healthcare), adjusting for inflation.
- Expiration of pandemic-era federal aid that boosted revenues in earlier years.
The combination of these resulted in a reduced surplus, and thus a smaller refund for taxpayers.
The Revenue Outlook — What It Means for the Future
According to legislative forecasts:
- The state’s general-fund revenue is expected to fall by about 1.1% in the next fiscal year.
- No TABOR refund is projected for 2027, making that a potential first pause since 2020.
- However, revenue is expected to recover somewhat in the 2026-27 cycle, which may allow refunds to resume in future years.
Thus, while the refund in 2025 is modest, the program remains active — just sensitive to economic conditions.
Conclusion
For Colorado taxpayers, the 2025 TABOR refund still represents a return of excess government revenue — but it also serves as a clear indicator of the state’s fiscal environment. With $296.1 million above the spending cap triggering refunds of $20–$62, the reduced amounts reflect slower growth, increased spending, and a tighter budget outlook. Filing your 2025 tax return on time — and ensuring your details are correct — will ensure you receive this refund automatically. While the amounts aren’t large this year, ongoing economic shifts mean this refund mechanism remains an important part of how Colorado handles surplus revenue.
FAQ
How do I know if I’m eligible for the 2025 TABOR refund?
You are eligible if you are a full-year resident of Colorado, file your 2025 tax return (or the appropriate rebate application), and meet any other eligibility criteria set by the Department of Revenue.
When will the refund payment be made?
The refund will be issued as part of the 2025 tax-filing process in early 2026. It will arrive via direct deposit or check depending on how you file.
Why are the 2025 refund amounts so much smaller than recent years?
The surplus collected above the TABOR cap is much smaller this cycle (about $296 million), due to slower revenue growth, elevated state spending, and the end of pandemic-era boosts — which means smaller refund checks for taxpayers.
