DENVER ~ In a recent economic forecast presented to the Joint Budget Committee, the Governor's Office of State Planning and Budgeting revealed the potential impacts of H.R.1 on Colorado's revenue and tax credits. The federal tax policy changes, signed into law by President Trump, are expected to reduce revenue below the TABOR cap in FY 2025-26.

Governor Polis expressed concern over the negative effects of the White House's trade wars on the economy, citing increased costs and inflation as major concerns leading up to the holiday season. Despite these challenges, he reassured that Colorado is maintaining a healthy reserve to secure its fiscal future.

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As a result of lower revenue growth, two important tax credits for Coloradans - the Family Affordability Tax Credit (FATC) and the Earned Income Tax Credit (EITC) expansion - will be turned off for tax year 2026. This means that taxpayers will not be able to claim these credits when filing in early 2027.

According to OSPB estimates, Colorado is expected to have TABOR surpluses of $208.2 million and $581.1 million in FY 2026-27 and 2027-28 respectively. The full forecast, along with slides and supplemental materials, can be viewed by the public.

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