Simple Flat Tax | 4.4% on All Income | No Local Taxes
Colorado uses one of the simplest tax systems in the nation:
Note: Flat tax means your rate never changes. Someone making $50k pays 4.4%, and someone making $500k also pays 4.4%. Simple and predictable.
| Income Level | Colorado (4.4%) | California | Oregon |
|---|---|---|---|
| $50,000 | $2,200 (4.4%) | ~$2,100 (4.2%) | ~$3,375 (6.75%) |
| $75,000 | $3,300 (4.4%) | ~$3,750 (5.0%) | ~$5,063 (6.75%) |
| $100,000 | $4,400 (4.4%) | ~$5,800 (5.8%) | ~$7,313 (7.3%) |
| $200,000 | $8,800 (4.4%) | ~$16,000 (8.0%) | ~$16,113 (8.1%) |
Analysis: Colorado's flat 4.4% is competitive for middle class ($50k-$100k), but becomes a great deal for high earners ($150k+) compared to progressive states like CA and OR.
| State | Tax Structure | Rate/Top Rate | Tax on $75k |
|---|---|---|---|
| Colorado | Flat | 4.4% | $3,300 |
| Wyoming | No income tax | 0% | $0 |
| Kansas | Progressive (2 brackets) | 3.1% - 5.58% | ~$3,075 |
| Nebraska | Progressive (4 brackets) | 2.46% - 5.2% | ~$3,450 |
| New Mexico | Progressive (6 brackets) | 1.7% - 5.9% | ~$3,225 |
| Utah | Flat | 4.5% | $3,375 |
| Oklahoma | Progressive (6 brackets) | 0.25% - 4.75% | ~$2,888 |
Colorado offers significant tax breaks for retirees:
Income:
Colorado Tax:
Analysis: Despite $90k in retirement income, Colorado tax is only $1,144 thanks to Social Security exemption and pension subtraction. Very retiree-friendly!
| State | Tax Retiree Income? | Estimated Tax |
|---|---|---|
| Colorado | Partial (exemptions) | ~$1,144 |
| Wyoming | No income tax | $0 |
| Arizona | Yes (2.5% flat) | ~$1,250 |
| California | Yes (progressive) | ~$3,500 |
| Oregon | Yes (progressive) | ~$6,000 |
Colorado does not have a state-specific standard deduction. Instead, you start with your federal taxable income (after federal standard deduction of $14,600 single / $29,200 MFJ), then apply Colorado-specific additions and subtractions.
Colorado taxable income = Federal taxable income + CO additions - CO subtractions. Common additions: interest from other states' bonds. Common subtractions: Social Security benefits, pension income (if eligible), military pay.
Yes, capital gains are taxed as ordinary income at the 4.4% rate. There is no separate capital gains rate in Colorado.
Colorado state tax returns are due on April 15, 2026 for the 2025 tax year (same as federal). Extensions are available until October 15, 2026.
Yes! Colorado offers a child tax credit of up to $1,200 per child under age 6 (adjusted gross income limits apply). This helps offset childcare costs for working families.
Colorado has a low 0% state sales tax on groceries (as of 2025, recently eliminated). However, local jurisdictions may still charge up to 3-4% on food, much lower than the ~8-11% on other goods.
💡 Money-Saving Tip: Avoid TurboTax ($69+ for state) - Cash App or FreeTaxUSA saves you $50-70!