Colorado Home Modification Tax Credit

Colorado Home Modification Tax Credit

The State of Colorado has created a tax credit with the vision that individuals with an illness or disability wouldn’t be deterred from retrofitting their residence for health, welfare or safety reasons due to financial constraints. The state income tax credit which was created under the bill known as HB18-1267 gives homeowners up to $5,000 per qualified individual per year for eligible costs incurred while retrofitting a residence. This credit is available for years 2019 through 2023.

Who Qualifies?

The following criteria determine eligibility:

  • Have an illness, impairment or disability that necessitates the requested home modification; and
  • Be an individual taxpayer with an adjusted family income at or below the income limit, which is $150,000 for the 2019 income tax year.
  • If the qualified individual is not the homeowner of the residence being modified, they must have the owner’s permission to modify the residence.
    * Please note, if a dependent is the only person with a disability in the family, then that family is not eligible to utilize this tax credit.
  • The residence being modified must exist before the work begins – the work may not be completed during initial construction of the residence.
  • The residence must be the primary residence of the qualified individual.
  • The residence must be located in Colorado.
  • Be necessary to ensure the health, welfare, and safety of a qualified individual;
  • Increase the residence’s visitability;
  • Enable greater accessibility and independence in the residence for a qualified individual;
  • Be required due to the qualified individual’s illness, impairment or disability; and
  • Allow a qualified individual to age in place;
  • Meet the Division of Housing’s Home Modification Construction Specifications; and
  • Be completed in the tax year for which the qualified individual will receive the tax credit.
    *Please note, durable medical equipment and other items that are not installed or affixed to the residence are not eligible modifications.

The process to claim this tax credit begins with evaluating the qualification criteria carefully and then determining what modifications your home needs. You will need to have a written estimate of the cost before you apply to the state for tax credit consideration.

To claim the tax credit, you will need to apply with the state of Colorado. Once your application is complete and submitted, the state will approve your application. Homeowners will need to send invoices and receipts from the project to the state, along with pictures of the project. After the work and the application are complete, you will receive a Tax Credit Certificate to file with your income taxes.

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Additional Resources
Home Modification Look Book
Home Modification Construction Specifications
Home Modification Tax Credit Program Guidelines

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