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SB26-029 • 2026

Health Savings Account Tax Credit

The bill creates an income tax credit for a resident individual's contributions to a health savings account that supports a high deductible health plan, as defined pursuant to federal law (credit). Th

Healthcare Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Sen. J. Carson
Last action
2026-02-03
Official status
Senate Committee on State, Veterans, & Military Affairs Postpone Indefinitely
Effective date
Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Health Savings Account Tax Credit

The bill creates an income tax credit for Colorado residents who contribute to health savings accounts supporting high deductible health insurance plans, with limits based on filing status and a time frame from January 1, 2027 to December 31, 2032.

What This Bill Does

  • Creates an income tax credit for contributions made by individuals to health savings accounts (HSAs) supporting high deductible health insurance plans.
  • Limits the credit amount based on filing status: $500 for single filers, $1,000 for joint filers, and $1,500 for family health plans.
  • Sets a time frame from January 1, 2027 to December 31, 2032 during which the credit is available.
  • Does not allow unused portions of the tax credit to be carried forward or refunded if they exceed an individual's income taxes due.

Who It Names or Affects

  • Colorado residents who contribute to health savings accounts supporting high deductible health insurance plans.

Terms To Know

Health Savings Account (HSA)
A tax-advantaged financial account designed for individuals enrolled in a high-deductible health plan to save for medical expenses.
High Deductible Health Plan
A type of health insurance that has lower premiums and higher deductibles compared to traditional plans, often paired with an HSA.

Limits and Unknowns

  • The bill does not specify what happens if the tax credit exceeds the individual's income taxes due.
  • It is unclear how many individuals will benefit from this tax credit or its overall impact on healthcare costs.

Bill History

  1. 2026-02-03 Senate

    Senate Committee on State, Veterans, & Military Affairs Postpone Indefinitely

  2. 2026-01-14 Senate

    Introduced In Senate - Assigned to State, Veterans, & Military Affairs

Official Summary Text

The bill creates an income tax credit for a resident individual's contributions to a health savings account that supports a high deductible health plan, as defined pursuant to federal law (credit). The credit is an amount equal to 25% of the amount of the contribution, limited to:
$500 for a single filer;
$1,000 for joint filers; and
$1,500 for contributions to a family health plan.
The credit is available beginning January 1, 2027, through December 31, 2032.
If the credit exceeds the income taxes due on the resident individual's income, the amount of the credit not used to offset income taxes is not carried forward as tax credits against the resident individual's subsequent years' income tax liability and is not refunded to the individual.
(Note: This summary applies to this bill as introduced.)

Current Bill Text

Read the full stored bill text 
Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED

LLS NO. 26-0316.01 Jed Franklin x5484 SENATE BILL 26-029
Senate Committees House Committees
State, Veterans, & Military Affairs
A BILL FOR AN ACT
CONCERNING AN INCOME TAX CREDI T FOR A CONTRIBUTION TO A101
HEALTH SAVINGS ACCOUNT. 102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
The bill creates an income tax credit for a resident individual's
contributions to a health savings account that supports a high deductible
health plan, as defined pursuant to federal law (credit). The credit is an
amount equal to 25% of the amount of the contribution, limited to:
! $500 for a single filer;
! $1,000 for joint filers; and
SENATE SPONSORSHIP
Carson,
HOUSE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
! $1,500 for contributions to a family health plan.
The credit is available beginning January 1, 2027, through
December 31, 2032.
If the credit exceeds the income taxes due on the resident
individual's income, the amount of the credit not used to offset income
taxes is not carried forward as tax credits against the resident individual's
subsequent years' income tax liability and is not refunded to the
individual.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 39-22-131 as2
follows:3
39-22-131. Tax credit for contributions to a health savings4
account - high deductible insurance plan - tax preference5
performance statement - legislative declaration - repeal.6
(1) (a) I N ACCORDANCE WITH SECTION 39-21-304 (1), WHICH7
REQUIRES EACH BILL THAT CREATES A NEW TAX EXPENDITURE TO INCLUDE8
A TAX PREFERENCE PERFORMANCE STATEMENT AS PART OF A STATUTORY9
LEGISLATIVE DECLARATION , THE GENERAL ASSEMBLY FINDS AND10
DECLARES THAT THE PURPOSE OF THE TAX EXPENDITURE CREATED IN11
SUBSECTION (2) OF THIS SECTION IS TO PROVIDE TAX RELIEF TO CERTAIN12
INDIVIDUALS BY PROVIDING A FINANCIAL INCENTIVE FOR MAKING A13
CONTRIBUTION TO A HEALTH SAVINGS ACCOUNT.14
(b) T HE GENERAL ASSEMBLY AND THE STATE AUDITOR , IN15
CONSULTATION WITH THE DEPARTMENT OF REVENUE, SHALL MEASURE THE16
EFFECTIVENESS OF THE CREDIT ALLOWED BY THIS SECTION BY17
DETERMINING THE INCREASE IN CONTRIBUTIONS TO HEALTH SAVINGS18
ACCOUNTS DUE TO THE CREDIT.19
(2) FOR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY20
1, 2027, BUT PRIOR TO JANUARY 1, 2033, A RESIDENT INDIVIDUAL WHO21
SB26-029-2-
CONTRIBUTES TO A HEALTH SAVINGS ACCOUNT THAT SUPPORTS A HIGH1
DEDUCTIBLE HEALTH INSURANCE PLAN AS DEFINED IN 26 U.S.C. SEC. 2232
(c)(2), INCLUDING A QUALIFYING HIGH DEDUCTIBLE HEALTH INSURANCE3
PLAN ISSUED BY AN EXCHANGE ESTABLISHED UNDER THE COLORADO4
HEALTH BENEFIT EXCHANGE CREATED IN ARTICLE 22 OF TITLE 10, IS5
ALLOWED, SUBJECT TO SUBSECTION (3) OF THIS SECTION , A CREDIT6
AGAINST THE INCOME TAXES IMPOSED BY THIS ARTICLE 22 IN AN AMOUNT7
EQUAL TO TWENTY-FIVE PERCENT OF THE AMOUNT CONTRIBUTED TO THE8
HEALTH SAVINGS ACCOUNT DURING THE TAXABLE YEAR FOR WHICH THE9
CREDIT IS CLAIMED.10
(3) T HE AMOUNT OF THE CREDIT ALLOWED PURSUANT TO THIS11
SECTION SHALL NOT EXCEED:12
(a) FIVE HUNDRED DOLLARS FOR A SINGLE FILER;13
(b) ONE THOUSAND DOLLARS FOR JOINT FILERS; AND14
(c) ONE THOUSAND FIVE HUNDRED DOLLARS FOR CONTRIBUTIONS15
TO A FAMILY HEALTH PLAN, WHETHER THE CONTRIBUTION IS BY A SINGLE16
FILER OR JOINT FILERS.17
(4) IF THE CREDIT ALLOWED PURSUANT TO THIS SECTION EXCEEDS18
THE INCOME TAXES DUE ON THE RESIDENT INDIVIDUAL 'S INCOME , THE19
AMOUNT OF THE CREDIT NOT USED TO OFFSET INCOME TAXES IS NOT20
CARRIED FORWARD AS TAX CREDITS AGAINST THE RESIDENT INDIVIDUAL'S21
SUBSEQUENT YEARS' INCOME TAX LIABILITY AND IS NOT REFUNDED TO THE22
INDIVIDUAL.23
(5) THIS SECTION IS REPEALED, EFFECTIVE DECEMBER 31, 2037.24
SECTION 2. Act subject to petition - effective date. This act25
takes effect at 12:01 a.m. on the day following the expiration of the26
ninety-day period after final adjournment of the general assembly (August27
SB26-029-3-
12, 2026, if adj ournment sine die is on May 13, 2026); except that, if a1
referendum petition is filed pursuant to section 1 (3) of article V of the2
state constitution against this act or an item, section, or part of this act3
within such period, then the act, item, section, or part will not take effect4
unless approved by the people at the general election to be held in5
November 2026 a nd, in such case, will take effect on the date of the6
official declaration of the vote thereon by the governor.7
SB26-029-4-