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Fire Mitigation - Tax Credit vs. Tax Deduction
By Splintered Forest - June 18, 2016
Many Colorado residents are unaware of the current tax deduction that applies to homeowners who complete fire mitigation on their property to recover actual out of pocket expenses. The Colorado Department of Revenue Taxpayer Service Division provided a document for homeowners to better understand the tax deduction available for mitigation efforts. To view this document, visit: http://ppwpp.org/wp-content/uploads/2014/02/Income65.pdf
The tax deduction currently offered is often confused with the tax credit. This now defeated bill would have given homeowners a tax credit for their mitigation efforts - a dollar for dollar tax credit to a homeowner. To learn more about the bill that was proposed, visit: http://www.leg.state.co.us/clics/clics2014a/csl.nsf/fsbillcont3/14168649F974992C87257C30000630F3?Open&file=HB1009_f1.pdf
What does all this mean to Colorado property owners?
There is a current tax deduction available to qualifying homeowners in Colorado. However, this current bill only lets property owners recover 4.63% of their mitigation costs whereas a tax credit could provide a dollar for dollar credit to their tax bill. While Splintered Forest cannot provide tax advice, we do encourage all residents to contact their state representative to express their interest in new legislation.
If you have any questions or would like to know more about fire mitigation and the associated costs, please give a member of our crew a call today at 303-819-9840 to schedule your free, no obligation estimate.
** Please note, we have provided the links above as an informational overview only. Any homeowner looking to take advantage of a fire mitigation tax deduction should consult with their tax preparer or a CPA to determine what they qualify for.