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Colorado Income Tax Guide 2026 | 4.4% Flat Rate, TABOR & Calculator

Daniel · CountryTaxCalc Updated June 2026
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KEY INSIGHT
At $100,000 gross income, a Colorado single filer pays approximately $3,758 in state income tax — an effective rate of 3.76%. Colorado's flat 4.4% rate applies uniformly to all income levels. Social Security is fully exempt from Colorado tax, and TABOR refunds may further reduce what residents owe.
At a glance

Key Facts

State Income Tax Rate (2026)
Flat 4.4% on all Colorado taxable income — no brackets, same rate at every income level
At $100,000 Income (Single)
$100,000 − $14,600 std deduction = $85,400 taxable; 4.4% × $85,400 = $3,758 Colorado tax (3.76% effective rate)
Standard Deduction
$14,600 (single) / $29,200 (MFJ) — Colorado conforms to federal standard deduction for 2026
TABOR Refunds
When Colorado's revenue exceeds constitutional limits, the excess is refunded to taxpayers — can temporarily reduce effective rate below 4.4%
Social Security
Fully exempt from Colorado state income tax — regardless of income level
Property Tax
~0.51% effective average — one of the lowest in the US; TABOR and historic amendments constrain assessment growth
Local Income Tax
None — no Colorado city levies a local income tax on residents' wages
Introduction

Colorado's income tax system is one of the simplest in the United States: a flat 4.4% rate applies to all taxable income, regardless of how much you earn. There are no brackets, no phase-outs based on income, and no complex calculations — just a single rate applied after subtracting the standard deduction ($14,600 for single filers in 2026).

Colorado also has a unique constitutional provision called TABOR (Taxpayer's Bill of Rights) that requires excess state revenue to be refunded to taxpayers. In recent high-growth years, this has temporarily reduced the effective income tax rate below 4.4%. Social Security is fully exempt, property taxes average a very low ~0.51%, and no Colorado city imposes a local income tax — making Colorado one of the more tax-efficient states in the Mountain West.

Section 01

Colorado's 4.4% Flat Income Tax Rate

Colorado imposes a single flat income tax rate of 4.4% on all taxable income, regardless of how much you earn. There are no brackets — a person earning $30,000 pays the same percentage as someone earning $3,000,000. Colorado taxable income starts with federal adjusted gross income, with certain Colorado-specific additions and subtractions applied. The 4.4% rate was reduced from 4.55% in prior years under Colorado's TABOR mechanism. This simplicity makes Colorado tax returns relatively straightforward compared to states with multiple brackets.
Section 02

TABOR — Colorado's Revenue Refund Mechanism

Colorado's Taxpayer's Bill of Rights (TABOR) requires the state to refund excess revenue to taxpayers when state income exceeds TABOR growth limits. When triggered, TABOR refunds can temporarily lower Colorado's effective tax rate below 4.4% for the year in question. In years with TABOR refunds, Colorado taxpayers receive a direct refund check or income tax rate reduction. TABOR has been triggered repeatedly in recent years due to strong Colorado economic growth. The 4.4% rate shown is the baseline; check the Colorado Department of Revenue for any active TABOR rate adjustments for the current tax year.
Section 03

Social Security and Retirement Income Exemptions

Colorado fully exempts Social Security benefits from state income tax — regardless of your income level. This is a significant benefit compared to states like Minnesota, Vermont, and Connecticut that partially or fully tax Social Security. Colorado also provides generous retirement income exemptions: pension income from state and federal government sources is exempt up to $24,000 per year. Private pension and retirement account (401k, IRA) distributions receive age-based partial exemptions. Colorado is generally considered retirement-friendly from an income tax perspective.
Section 04

Colorado Property Tax — Low Effective Rates

Colorado's effective property tax rate averages approximately 0.51% — one of the lowest in the US. On a $400,000 home, that's roughly $2,040 per year. Colorado's low property taxes are partly a result of the Gallagher Amendment (which capped residential assessment ratios) and TABOR limitations on local government revenue. In recent years, some Colorado jurisdictions have seen property tax increases due to rapidly rising home values, but the effective rate remains low by national standards.
Section 05

Colorado vs Neighboring States

Compared to its neighbors, Colorado's flat 4.4% rate sits in the middle of the spectrum. Utah has a similar flat rate (4.65%). Wyoming has no income tax. Kansas has brackets up to 5.7%. New Mexico brackets reach 5.9%. At $100,000 income, a Colorado resident pays approximately $3,758 in state income tax compared to $0 in Wyoming, ~$3,968 in Utah, and ~$4,200–$4,800 in other neighboring states. Wyoming is the primary tax alternative for high-income Colorado residents, though Wyoming's lifestyle and economic opportunities differ significantly.
Section 06

Denver Local Taxes

Denver does not levy a city or local income tax on residents' earnings (unlike cities such as New York City, Philadelphia, or Detroit). Denver does impose an employee head tax ($5.75/month per employee) and occupational privilege tax ($4.00/month per employee for businesses). These amounts are very small compared to the income taxes levied in other major US cities. The absence of a Denver city income tax makes Colorado's total tax burden more favorable for Denver residents than the state rate alone suggests for comparison.
Section 07

Colorado Capital Gains Tax

Colorado taxes capital gains as ordinary income at the same flat 4.4% rate. There is no special capital gains rate at the Colorado state level. Long-term capital gains that receive preferential 0%, 15%, or 20% federal treatment are subject to Colorado's 4.4% flat rate. For investors, Colorado's relatively low 4.4% rate on capital gains compares favorably to California (13.3% on all gains), Oregon (9.9%), and Minnesota (9.85% as ordinary income).
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FAQ

Frequently Asked Questions

What is Colorado's income tax rate for 2026?

Colorado's income tax rate for 2026 is a flat 4.4% on all taxable income. There are no income brackets — everyone pays the same percentage regardless of how much they earn. At $100,000 gross income, the effective rate is approximately 3.76% after subtracting the standard deduction ($14,600 for single filers).

What is TABOR and does it reduce my Colorado taxes?

TABOR (Taxpayer's Bill of Rights) is a Colorado constitutional amendment that requires excess state revenue to be returned to taxpayers. When Colorado's revenue exceeds TABOR limits, the state reduces the income tax rate or sends direct refund checks. In recent years with strong economic growth, TABOR has been triggered — temporarily reducing the effective tax rate below 4.4%. Check the Colorado Department of Revenue annually for any active TABOR adjustments.

Does Colorado tax Social Security income?

No — Colorado fully exempts Social Security benefits from state income tax, regardless of your total income. This applies to all Colorado residents regardless of age or filing status. Colorado also exempts up to $24,000 of state and federal pension income and provides age-based exemptions for private retirement account withdrawals.

Does Colorado have local income taxes?

No city in Colorado levies a local income tax on wages. Denver and other cities have small business occupational privilege taxes ($4–$5.75/month per employee) but these are not income taxes on individuals. This means Colorado residents pay only the state flat rate of 4.4% — no additional city tax layered on top, unlike residents of New York City, Philadelphia, or Detroit.

How low is Colorado's property tax?

Colorado's effective property tax rate averages approximately 0.51% — among the lowest in the US. On a $400,000 home, that's roughly $2,040 per year. Colorado's low property taxes are constrained by historical constitutional amendments (Gallagher, TABOR) that limit assessment values and local government revenue growth.

Is Colorado a good state for retirees from a tax perspective?

Yes — Colorado is considered retirement-friendly. Social Security is fully exempt, state/federal pension income is exempt up to $24,000, and private retirement account withdrawals receive partial exemptions. The 4.4% flat rate on remaining income is moderate. Combined with low property taxes (~0.51%) and no city income tax, Colorado is one of the better Midwestern/Mountain states for retiree taxation.

How does Colorado compare to Wyoming for taxes?

Wyoming has no state income tax, which is Colorado's primary tax disadvantage versus its northern neighbor. At $100,000 income, a Colorado resident pays ~$3,758 in state income tax versus $0 in Wyoming — a $3,758 annual difference. However, Wyoming's smaller cities (Cheyenne, Casper) lack the economic opportunities, cultural amenities, and outdoor recreation infrastructure of Denver and Colorado's Front Range metros.

Are capital gains taxed in Colorado?

Yes — Colorado taxes capital gains as ordinary income at the flat 4.4% rate. There is no special capital gains rate at the state level. However, 4.4% is significantly lower than California (13.3%), Oregon (9.9%), or Minnesota (9.85%), making Colorado relatively favorable for investors compared to other western states.
Disclaimer:This guide is for educational purposes only and does not constitute tax or financial advice. Colorado's income tax rate may be adjusted by TABOR refund mechanisms — verify the current rate with the Colorado Department of Revenue. Standard deduction amounts shown reflect 2026 federal conformity estimates. Consult a qualified tax professional for advice specific to your situation.
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