Colorado's wildfire mitigation tax credit — the correct numbers
Search for this credit and you’ll find contractor blogs quoting caps that are off by a factor of four. Here are the current rules from the Colorado Department of Revenue directly.
The credit (tax years 2023–2027)
- 25% of your actual out-of-pocket costs for performing wildfire mitigation measures on your property, up to $2,500 per year.
- It’s a credit — it comes off your Colorado tax bill, not just your taxable income.
- Income-limited: your federal taxable income must be under the year’s cap ($126,300 for tax year 2025; the limit adjusts annually — check the current figure before counting on it).
- Out-of-pocket means exactly that: costs reimbursed by a county cost-share or grant aren’t yours to claim. If Summit’s 50/50 program paid half your $12,000 job, your credit math starts from your $5,900, not $12,000.
How to claim it
File the Individual Credit Schedule (DR 0104CR) with your Colorado return, and submit receipts documenting the expenses — attached to the return or via the E-Filer Attachment tool on Revenue Online. Keep contractor invoices itemized: what was cut, where, and when.
Why you’ll see different numbers elsewhere
Two reasons. First, Colorado previously offered a wildfire mitigation subtraction (a deduction, not a credit) — tax years 2024 and prior — and plenty of pages still describe that regime. Second, some sites simply quote stale caps. When a figure matters to your budget, the Department of Revenue’s pages beat any blog, including this one — which is why every number here links to them.
Stack it with your county’s money
The credit combines with county assistance (in the right order — cost-share first, credit on what’s left of your share):
- Summit: 50/50 Wildfire Council grants
- La Plata and Archuleta: Wildfire Adapted Partnership cost-share
- Boulder: Wildfire Partners rebates
- El Paso: CSFD stipends in the city WUI
The stack changes the economics of a serious defensible-space project: a cost-share can halve the bill, and the credit takes another quarter off your remaining share (within the annual cap). The insurance discount your documented work can earn under the new score rules is the third layer.
The credit is currently written to run through tax year 2027 — mitigation done this season claims on this year’s return; a project you keep postponing may outlive the credit.