What is the First Time Home Buyer Savings Account Subtraction?
Colorado taxpayers can set up a first time home buyer savings account. Interest and capital gains in this account are not taxed by Colorado if eventually used for qualified costs. Colorado allows a maximum subtraction per year of $14,000 ($28,000 if married filing jointly). There's also a maximum subtraction of $50,000 for all years.
To claim this credit, you must agree to the following:
- You're only claiming the interest earned from the account.
- You received interest from the account and have included the amount in your Federal Taxable Income on your federal return.
- You're not claiming mortgage interest (reported on a 1098) for a house you currently own.
- Any withdrawals taken from this account was for an eligible expense (see instructions for eligible expenses).
For more information see the DR 0350 instructions