Health Law Monitor

Colorado HB 22-1163: State Income Tax Deduction for Medical Expenses

February 10, 2022

By: Eric R. Holway

On Friday, February 4, 2022, Colorado House Bill 22-1163 was introduced in response to growing out-of-pocket medical expenses in the state.  These expenses are expected to increase by nearly ten percent per year over the next five years.  Up to five hundred thousand Coloradans may lose their coverage under Medicaid in the near future, resulting in substantially more out-of-pocket medical expenses.  If enacted, the Bill would allow Colorado taxpayers to claim a deduction of certain qualifying medical expenses, so long as those expenses: (1) are not claimed as deductions on the taxpayer’s federal income tax return; (2) are not paid or reimbursed from a medical savings account; and (3) are not paid or reimbursed by the taxpayer’s insurance company.  If enacted, the bill would apply to income tax for the next seven years, from 2023 through 2029.

The proposed bill is sponsored by State Representative Matt Soper and Senator Jim Smallwood.