In 2023, Colorado sent everyone $800. In 2024, it was up to $571. In 2026? $62 if you're lucky. This is what happens when you build a budget around windfalls.
I remember the first TABOR check. It was 2023. People were posting photos on social media, planning vacations, buying Pelotons, 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. The refund formula changed. And millions of Coloradans are about to get a shock when they file their 2026 taxes next spring.
Let me walk you through what happened, why it matters, and what you should do instead of waiting for a government handout.
The History: How We Got Here
TABOR (the Taxpayer's Bill of Rights) is Colorado's constitutional amendment that limits government spending and refunds excess revenue to taxpayers. When the economy boomed after the pandemic, state revenue soared. So did the refunds.
2023: $800 per person (actual refund amounts varied by income, but that was the average)
2024: $571 per person
2025: around $180-$200 per person
2026: $62 per person (projected; some filers may get slightly more or less)
The decline is due to three factors: slower economic growth, a change in the refund calculation formula (from a flat rate to a tiered system), and the fact that the state is no longer sitting on huge pandemic‑era surpluses.
Whatever the reason, the result is the same: less money coming back to you.
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 (not his real name). Chris is a 34‑year‑old electrician. In 2024, he got a $571 refund. He used it to buy a Peloton. He didn't have an emergency fund. He didn't pay down debt. He bought a Peloton. Then his car broke down in 2025, and he had to put $2,000 on a credit card at 22% 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 $180. His 2026 refund will be about $62. He's stuck with the credit card debt.
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.
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.
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. $50 a month into a "car repair" fund gives you $600 after a year. That's more than any TABOR refund will give you.
4. If you do get a refund, use it wisely. The order of operations: emergency fund (if you don't have 3 months of expenses), high‑interest debt (credit cards), Roth IRA (if you have earned income), then maybe 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.
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.
I know that's hard. I know that's easier said than done. But it's the only sustainable path forward.
What About the Tax Change? The New Tiered System
The state changed the refund formula starting in 2025. Instead of a flat refund per person, it's now tiered based on income. Lower‑income filers get a slightly larger share, higher‑income filers get a slightly smaller share. But even lower‑income filers are seeing much smaller refunds than in 2023/2024.
If you want to geek out on the math, you can look up the TABOR refund calculator on the Colorado Department of Revenue website. But the bottom line is the same for almost everyone: don't count on it.
Chris finally paid off his Peloton debt last month. He told me, "I'm never buying anything on impulse with a tax refund again." Good. Lesson learned.
I will keep posting updates on this. Check back soon.
P.S. Cooper doesn't care about TABOR. He only cares about treats. That's a simpler life.
This article is for informational purposes. TABOR refund amounts vary by income and filing status. Consult a tax professional.
Marcus Thompson
