Colorado state taxes at a glance
| Individual income tax | Flat-rate income tax |
|---|---|
| Rate structure | A flat individual income tax rate of 4.4% in recent published tables, applied to taxable income that starts from your federal taxable income. The rate can be adjusted temporarily by state law; verify the current rate. |
| Tax agency | Colorado Department of Revenue, Taxation Division |
| Main individual return | Form DR 0104 (individual income tax return) |
| Local income taxes | No general local income taxes. Some cities, such as Denver, charge a small monthly occupational privilege tax on employees and employers. |
| Sales tax | One of the lowest state rates (2.9%) but among the highest average local rates, so combined rates vary widely. Many home-rule cities, including Denver, collect their own sales tax. |
| Property tax | Assessed by counties and billed by local taxing districts. Colorado has separate residential and nonresidential assessment rates and has changed property tax limits frequently; check your county assessor. |
| Retirement & Social Security | Colorado taxes Social Security only for people ages 55–64 above income limits; those 65 and older can subtract benefits entirely, subject to current rules. Pension and retirement income deductions depend on age. |
Verify current-year figures: state rates, brackets, credits and filing rules change. Treat this page as a starting orientation and confirm details on the Colorado Department of Revenue, Taxation Division website.
How Colorado income tax works
Colorado taxes individual income at one flat rate. Recent Colorado guidance and Tax Foundation’s 2026 table list 4.4%, but the rate is not completely fixed: state law ties it to the Taxpayer’s Bill of Rights (TABOR) revenue cap, and in some years a temporary rate reduction has applied. Use the rate printed in the current DR 0104 instructions rather than assuming it is the same every year.
The return’s starting point is unusual. Colorado begins with federal taxable income (not AGI), which already includes the federal standard or itemized deduction, then makes additions and subtractions. Tax Foundation lists Colorado among states that include the federal standard deduction in their income starting point, which means federal deduction changes flow through automatically. If you want to see how the federal standard deduction works, read standard deduction vs. itemized.
Social Security and retirement treatment depend on your age. State summaries compiled in 2026 describe benefits as taxed in Colorado only for people ages 55 to 64 whose income exceeds specified limits (about $75,000 single or $95,000 joint), with a larger subtraction for those 65 and older. Age cutoffs, income thresholds and subtraction caps are set by statute, so read the current guide before assuming your benefits are exempt. See our general explainer on whether Social Security is taxable for the federal side.
Filing your Colorado return and free options
Colorado’s free state option is Revenue Online, where residents can file Form DR 0104 online without logging in, and later use an account to check refunds and make payments. Colorado also announced that it would take part in the IRS Direct File pilot for the 2026 season, but the federal government ended that program, so it is not available. Always start from the Taxation Division’s “file individual income tax online” page, which lists current free and commercial options.
Colorado also has a handful of separate payments and refunds tied to TABOR and other programs, which sometimes appear as credits or refunds on the return. Because those programs change by year, check the Taxation Division’s individual income tax guide, updated each January, for what applies to you. If you cannot pay, see what to do if you can’t pay and contact the Department about a payment plan early.
For the federal side, see our guides to free federal filing options and the complete guide to filing taxes.
Things Colorado residents often ask about
- Home-rule sales tax: Denver and many other cities collect their own sales and use tax, so sellers may file with both the state and the city.
- Occupational privilege tax: Denver charges a small monthly per-employee tax on work done in the city; Aurora repealed its version effective 2025.
- TABOR: revenue above the state cap can be refunded through credits or temporary rate changes; the details change by year.
- FAMLI premiums: the paid family and medical leave payroll premium on your paycheck is not income tax.
- Direct File ended: despite earlier announcements, Colorado residents use Revenue Online or approved software, not IRS Direct File.
Official Colorado links
- Colorado Department of Revenue: Taxation
- Colorado: file individual income tax online
- Colorado individual income tax guide
- Federation of Tax Administrators: State tax agencies
Frequently asked questions
What is the Colorado income tax rate?
Colorado uses a flat rate, listed at 4.4% in recent published tables. The rate can change temporarily under TABOR, so confirm it in the current DR 0104 instructions.
Can I file my Colorado return for free?
Yes. Revenue Online lets Colorado residents file Form DR 0104 online at no cost, and Free File partners may include state returns for eligible filers.
Does Colorado tax Social Security benefits?
Only in part. State summaries describe taxation for ages 55–64 above income limits, with larger subtractions for those 65 and older. Check the Department’s current guide.
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.