In 2023, Colorado sent everyone $800. In 2024, refunds ranged from $177 to $565. In 2026? $62 if you're lucky — and state economists predict no refunds at all the following year. This is what happens when you build a budget around windfalls.
I remember the first big TABOR check. It was 2023. People were posting photos on social media, planning trips to Estes Park, buying new tires, paying off credit cards. It felt like free money. And for a while, it was. Now the party's over. The state's revenue growth has slowed. New tax credits for families are redirecting funds. And millions of Coloradans are about to get a shock when they realize their annual cushion is gone.
The History: How We Got from $800 to $62
TABOR — the Taxpayer's Bill of Rights — is Colorado's constitutional amendment that limits government spending and refunds excess revenue. When the economy boomed after the pandemic, state revenue soared. So did the refunds.
But 2026 is different. The surplus for fiscal year 2025 was only $296 million. After covering homestead property tax refunds for seniors and disabled veterans — which take up nearly two-thirds of the pool — only about $100 million remained for general refunds. Spread across millions of filers, that became $20 to $62 per person. The days of planning a vacation around your TABOR check are, for now, on hold.
Meanwhile, the governor's budget proposal seeks to keep $306 million that would have gone to future refunds, claiming an "accidental overpayment" in prior years. The Joint Budget Committee staff has questioned whether this is legal. But regardless of the court battles, the trend is clear: TABOR refunds are shrinking, and you should not count on them.
The Problem: People Planned Around the Refund
I've seen too many clients treat these refunds as "found money" to spend on non-essentials. And now that the refund is tiny, those same people are scrambling.
Let me tell you about Chris. Chris is a 34-year-old electrician in Thornton. In 2024, he got a $571 refund. He used it to buy a new mountain bike. He didn't have an emergency fund. He didn't pay down debt. He bought a bike. Then his truck needed transmission work in 2025: $2,400. He had to put it on a credit card at 23% interest. He's still paying that off.
Chris told me, "I thought I'd get another big refund in 2025 and use that to pay off the card." He didn't. His 2025 refund was around $190. His 2026 refund was $42. He's stuck with the credit card debt, and the interest has added another $400 to the balance.
I'm not saying you can never use a tax refund for fun. But I am saying that if you've been relying on TABOR to balance your budget, you need to adjust now. Because the math has changed, and the state isn't asking your permission.
What You Should Do Instead
Here's my advice for every Coloradan who's been counting on TABOR refunds:
1. Set your expectations to zero. Assume you're getting nothing back. If you get something, treat it as a bonus. Don't spend it before you have it.
2. Build a budget that works without windfalls. Your budget should be based on your regular take-home pay, not on tax refunds, bonuses, or side hustle income. Those are extras. If your budget only balances with a $500 refund, your budget is broken.
3. Create a sinking fund for irregular expenses. Instead of waiting for a refund to pay for car repairs or holiday gifts, save a small amount each month. $75 a month into a "car repair" fund gives you $900 after a year. That's more than any TABOR refund will give you.
4. If you do get a refund, use the hierarchy. Emergency fund first (if you don't have 3 months of expenses), high-interest debt second, retirement savings third. Only then consider something fun.
The Emotional Side: Letting Go of the Windfall Mentality
I get it. It feels good to get a big check from the government. It feels like you're getting something for nothing. But that feeling is dangerous because it encourages you to spend money you haven't earned yet.
I've had clients say to me, "But Marcus, I've been counting on that refund to buy my kids' school clothes." My heart breaks for them. But I also have to be honest: that's a broken budget. If you need a tax refund to afford basic expenses, something is wrong at a structural level.
The solution isn't to hope for a bigger refund next year. The solution is to restructure your budget so you don't need it. That might mean picking up extra hours. It might mean cutting a subscription. It might mean having a hard conversation with your family about what you can actually afford. None of that is easy. But it's the only sustainable path forward.
Frequently Asked Questions
Why are Colorado TABOR refunds so small in 2026?
The state surplus dropped to $296 million for fiscal year 2025. After paying homestead property tax refunds for seniors and veterans, only about $100 million remained for general refunds. New tax credits like the expanded EITC and Family Affordability Tax Credit also reduce the refund pool. The result: refunds of $20 to $62 for most filers.
Will TABOR refunds ever go back to $800?
No one knows. It depends on state revenue growth, which depends on the economy, federal policy, and Colorado's population trends. State economists predict no surplus at all for 2026-27. My advice: never build a budget around a refund. Treat it like a bonus, not income.
What is Colorado's six-tier TABOR refund system?
Colorado switched from flat refunds to a tiered system based on adjusted gross income. Lower earners receive smaller absolute amounts but proportionally more relative to their tax burden. In 2026, the tiers range from roughly $20 for the lowest earners to $62 for the highest. Joint filers receive double these amounts.
How do I budget without relying on my tax refund?
Base your budget on your lowest reliable monthly income. Create sinking funds for predictable irregular expenses like car repairs, holiday gifts, and medical bills. Even $50 a month into each fund adds up to real money over time. If your budget only works with a refund, you need to either increase income or reduce fixed expenses.
What should I do with my $62 TABOR refund?
If you have high-interest credit card debt, put it toward that. If you're debt-free but have less than $1,000 in emergency savings, add it there. If your emergency fund is solid, put it in a Roth IRA. Do not spend it on something discretionary — it's not enough to improve your life as a purchase, but it can help as a payment toward financial stability.
Your TABOR refund isn't a financial plan. It's a weather vane. And right now, the wind has stopped blowing. The families who will be okay are the ones who never counted on it in the first place. Are you building a budget that works in a headwind, or are you still waiting for the breeze to push you forward?
