Catastrophic Health Insurance
GENERAL INFORMATION
Any employer who does not offer other health insurance may offer catastrophic health insurance to its employees. Any Catastrophic Health Insurance Premiums withheld by an employer can be subtracted from the employees taxable income on the "Other Subtractions" line of the Colorado Individual Income Tax return (Form 104). Self-employed persons cannot claim this subtraction. For more information, please see https://www.colorado.gov/pacific/sites/default/files/Income30.pdf
Income Tax - IRC 1341 (Repayment Subtraction)
If you claim the federal I.R.C. 1341 credit for a repayment of prior year income you can deduct the amount of the income on the “Other Subtractions” line of the Colorado return if the income was taxed in Colorado in the prior year. Write “I.R.C.1341 credit” as the explanation for this subtraction.
There is no state credit comparable to the federal credit for this circumstance. If you deducted the income on your federal return rather than claiming the credit, no Colorado subtraction is allowed since the income is not included in your federal taxable income (line 1 of Form 104). For more information, please see https://www.colorado.gov/pacific/sites/default/files/IRC1341Repayments.pdf
Medical Savings Accounts
GENERAL INFORMATION
Any Colorado employer, other than the federal government, may offer to establish medical savings accounts for its employees. [§39-22-504.7, C.R.S.] This medical savings account is established by Colorado law and differs from the Archer medical savings account established by federal law.
An employee may establish a medical savings account independently from an employer if the employer has not established such an account for the employee. Self-employed persons may not establish medical savings accounts.
The maximum amount that may be contributed to a medical savings account is $3,000 a year. The contribution may be made by the employer, by the employee, or by a combination of the two. Any amounts contributed to a medical savings account and any interest earned are Colorado tax free to the employee as long as such funds remain in the account. For more information, please see https://www.colorado.gov/pacific/sites/default/files/Income29.pdf
More information regarding Colorado Subtractions can be found at their Website.