Wildfire Mitigation Measures Tax Credit and Subtraction

How it works

Colorado says it provides tax incentives for performing wildfire mitigation measures on property located in Colorado. For tax years 2024 and prior, an income tax subtraction was allowed. For tax years 2023 through 2027, an income tax credit is allowed.

What the money covers

The Department of Revenue says wildfire mitigation measures include any of the following, so long as they meet or exceed applicable standards established by the Colorado State Forest Service or the Division of Fire Prevention and Control:

• creation of defensible space around structures
• establishment of fuel breaks
• thinning woody vegetation for the primary purpose of reducing risk to structures from wildland fire
• secondary treatment of woody fuels by lopping and scattering, piling, chipping, removing from the site, or prescribed burning

Amounts and matching

The source states that the credit amount depends on the tax year, and is based on the actual out-of-pocket expenses incurred and paid by the landowner. The page also states that for the subtraction, the amount was a percentage of actual out-of-pocket expenses, and that for tax years 2020-2024 the subtraction percentage was 50%. The source further says the subtraction amount could not exceed $2,500 or federal taxable income, whichever is less.

How to apply

The page directs taxpayers to file the applicable Colorado individual income tax forms and says the claim must be supported by receipts.

Timing and deadlines

The publication states that for tax years 2023 through 2027 the credit is available. For tax years 2024 and prior, the subtraction was available. The source also notes that for tax years 2023 and 2024, a taxpayer meeting all requirements may claim both the subtraction and the credit for the same wildfire mitigation costs.