Wildfire Mitigation Measures Income Tax Credit

How it works

The Colorado Department of Revenue says the state provides tax incentives for wildfire mitigation measures on property located in Colorado. For tax years 2023 through 2027, qualifying taxpayers may claim an income tax credit for actual out-of-pocket expenses for wildfire mitigation measures performed during that tax year.

The publication also says the earlier subtraction was allowed for tax years 2024 and prior, but that subtraction was repealed for 2025 and later.

What the money covers

Wildfire mitigation measures include:

• Creating defensible space around structures
• Establishing fuel breaks
• Thinning woody vegetation to reduce risk to structures from wildland fire
• Secondary treatment of woody fuels by lopping and scattering, piling, chipping, removing from the site, or prescribed burning

The work must meet or exceed applicable standards established by the Colorado State Forest Service or the Division of Fire Prevention and Control. The Department says costs paid by a landowner from, or reimbursed by, an incentive or grant do not qualify.

Amounts and limits

The Department’s publication says the credit is subject to annual limits, percentages, and income limits that vary by tax year. The page itself does not reproduce the full table in the search snippet, so I am not inventing the missing amounts here.

How to apply

Taxpayers must file an Individual Credit Schedule (DR 0104CR) with their Colorado Individual Income Tax Return (DR 0104) and submit copies of receipts documenting actual out-of-pocket expenses, either with the return or through the E-Filer Attachment function in Revenue Online.

Timing and deadlines

The publication states the credit is available for tax years 2023 through 2027. The subtraction was allowed only for tax years 2024 and prior.