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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Pennsylvania VS COUNTRY B Colorado

Side-by-side analysis of income tax, effective rates, and take-home pay for Pennsylvania and Colorado in 2026.

Daniel · CountryTaxCalc Updated August 2026 Tax Comparison 2026
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OVERVIEW
Pennsylvania's flat 3.07% income tax rate beats Colorado's flat 4.4% rate at every income level shown, saving $451/year at $50,000 and growing to $6,436/year at $500,000 income. But property tax tells the opposite story — Colorado's average effective property tax rate (about 0.48%, among the lowest in the nation thanks to TABOR-driven limits) is roughly a third of Pennsylvania's (about 1.49%), and the gap is large enough to flip the combined income-plus-property comparison in Colorado's favor for most homeowners: at $100,000 income with a $400,000 home, Colorado's total bill (about $5,612) is nearly $3,000/year lower than Pennsylvania's (about $8,556). Neither state has a blanket local income tax outside one exception each — Philadelphia residents pay an additional 3.79% city wage tax on top of Pennsylvania's state rate, while Colorado has no local income tax anywhere, though Denver-area sales tax can top 8.8%. On retirement income, Pennsylvania is the clear winner: it fully exempts Social Security, pensions, and 401(k)/IRA withdrawals at any age, while Colorado taxes pension and 401(k)/IRA income at 4.4% (with age-based deductions of $20,000-$24,000) and even taxes Social Security itself for residents under 65 or with income above set thresholds.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.

🔔
COUNTRY A
Pennsylvania
TAX RATE
3.07%
Flat Tax
Flat 3.07% state rate on all income; Philadelphia residents add a 3.79% city wage tax
🏔️
COUNTRY B
Colorado
TAX RATE
4.4%
Flat Tax (TABOR Protected)
Flat 4.4% state rate on all income, constitutionally capped by TABOR; no local income tax anywhere
TYPICAL ANNUAL DIFFERENCE
Moving from Colorado → Pennsylvania at $100,000
$1,116
That's $93/month back in your pocket
Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.
GROSS INCOME
🔔 PA TAX
🏔️ CO TAX
SAVINGS
10-YEAR
$50,000
$1,041
$1,492
$451
$4,510
$75,000
$1,808
$2,592
$784
$7,840
$100,000
$2,576
$3,692
$1,116
$11,160
$150,000
$4,111
$5,892
$1,781
$17,810
$250,000
$7,181
$10,292
$3,111
$31,110
$500,000
$14,856
$21,292
$6,436
$64,360
💡

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🔔

Pennsylvania Pros & Cons

+ PROS
  • Flat 3.07% state income tax beats Colorado's 4.4% flat rate at every income level — saving $451 to $6,436/year
  • Full retirement-income exemption: Social Security, pensions, and 401(k)/IRA withdrawals are all tax-free at the state level, at any age
  • No local income tax outside Philadelphia — most Pennsylvania residents pay only the flat 3.07% state rate with no city add-on
  • Two major lower-cost metros — Philadelphia and Pittsburgh — with strong healthcare, higher-education, and robotics/tech employers
− CONS
  • Significantly higher average property tax (~1.49%) than Colorado (~0.48%) — often erases some or all of PA's income-tax advantage for homeowners
  • Philadelphia residents pay an additional 3.79% city wage tax, pushing their combined rate to 6.86%
  • Pennsylvania levies an inheritance tax on transfers to non-spouse heirs (4.5%-15%) — Colorado has none
  • No TABOR-style constitutional protection against future income-tax increases, unlike Colorado's voter-approval requirement
🏔️

Colorado Pros & Cons

+ PROS
  • Much lower average property tax (~0.48%, among the lowest nationally) than Pennsylvania (~1.49%) — often flips the combined tax burden in Colorado's favor for homeowners
  • No local income tax anywhere in the state, unlike Philadelphia's 3.79% add-on for Pennsylvania residents
  • TABOR (Taxpayer Bill of Rights) constitutionally requires voter approval for any income-tax increase, giving long-term rate certainty
  • Denver/Boulder's tech and outdoor-recreation economy (Google, Lockheed Martin, a $62B outdoor industry) with strong wage growth
− CONS
  • 4.4% flat state rate costs $451 to $6,436/year more than Pennsylvania at every income level shown
  • Taxes 401(k), IRA, and pension income at 4.4% (age-based deductions of $20,000-$24,000 help, but don't fully offset it) — Pennsylvania exempts all of these entirely
  • Also taxes Social Security itself for residents under 65, or 65+ with income above $75,000 single/$95,000 married — Pennsylvania never taxes Social Security
  • Denver-area home prices (median around $590,000) are far higher than most of Pennsylvania, offsetting some of the property-tax-rate advantage in dollar terms
FAQ

Frequently Asked Questions

Is Pennsylvania or Colorado cheaper for state income tax?

Pennsylvania is cheaper at every income level. At $100,000, Pennsylvania's flat 3.07% costs $2,576 versus Colorado's flat 4.4% at $3,692 — a $1,116/year difference. At $500,000, the gap grows to $6,436/year. Both states use a simple flat-rate structure, so the percentage-point difference (3.07% vs 4.4%) scales consistently across all income levels.

Which state has lower property tax, Pennsylvania or Colorado?

Colorado has the far lower average effective property tax rate at roughly 0.48% — one of the lowest in the country — compared to Pennsylvania's roughly 1.49%, about triple. On a $400,000 home, that's about $1,920/year in Colorado versus $5,960/year in Pennsylvania, a difference of roughly $4,040/year.

So does the property tax gap flip who wins overall?

Yes, for most homeowners. At $100,000 income with a $400,000 home, Colorado's combined income-plus-property bill (about $5,612) is nearly $3,000/year lower than Pennsylvania's (about $8,556), because Colorado's property tax savings far outweigh its income-tax disadvantage. Renters, who don't pay property tax directly, will generally see Pennsylvania come out ahead on tax burden alone.

Does Philadelphia's city wage tax change the comparison?

Yes. Philadelphia residents pay a 3.79% city wage tax on top of the 3.07% state rate — a combined 6.86%. At $100,000 income, that's roughly $6,366 total, which is still below Colorado's $3,692 state tax only if you also add Colorado's local sales tax burden, but it narrows Pennsylvania's advantage substantially for Philadelphia residents specifically. Colorado has no local income tax anywhere to compare against.

Does either state tax retirement income like Social Security, pensions, and 401(k) withdrawals?

Pennsylvania fully exempts Social Security, pensions, and 401(k)/IRA withdrawals from state tax at any age — one of the most retirement-friendly structures in the country. Colorado taxes Social Security for residents under 65 or 65+ with income above $75,000 single/$95,000 married, and taxes pension/401(k)/IRA income at 4.4%, though it allows a $20,000 deduction (ages 55-64) or $24,000 deduction (65+). Pennsylvania is meaningfully more retirement-friendly.

How much would I save moving from Colorado to Pennsylvania?

At $100,000 income, moving from Colorado to Pennsylvania could save about $1,116/year in state income tax — but Pennsylvania's much higher property tax would likely offset that and then some for a homeowner. At $250,000 income, the income-tax savings grow to about $3,111/year, which more comfortably outweighs the property-tax difference for higher earners or renters.

What is TABOR and how does it affect Colorado's tax comparison with Pennsylvania?

TABOR (Taxpayer Bill of Rights) is a 1992 Colorado constitutional amendment requiring voter approval for any tax increase beyond inflation plus population growth. It has kept Colorado's rate falling (4.63% in 1999 to 4.4% today) and gives long-term predictability that Pennsylvania's legislature-set rate doesn't constitutionally guarantee. However, TABOR also limits state revenue, which correlates with Colorado ranking 40th nationally in per-pupil K-12 spending.

Is Denver/Boulder or Philadelphia/Pittsburgh better for job opportunities?

It depends on the field. Denver/Boulder is a major tech and outdoor-recreation hub (Google, Amazon, Lockheed Martin) with a $62B outdoor recreation industry, but Denver tech salaries run 15-25% below San Francisco or Seattle for comparable roles. Philadelphia and Pittsburgh offer strong healthcare, pharma, higher-education, and robotics/autonomous-vehicle employers (Carnegie Mellon) at a generally lower cost of living than Denver.
From the brief
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MT1940snon-dom regime unchanged since
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