Colorado’s state income tax is a flat 4.40 percent charged to every individual filer, no matter how much you earn. Your bill starts with your federal taxable income, gets adjusted up or down by Colorado-specific additions and subtractions, and then has the flat rate applied. The rate itself can drop temporarily in years when the state collects more revenue than its constitutional cap allows.
The Flat Rate and Why It Sometimes Drops
Colorado does not use graduated brackets. A single percentage applies to every taxpayer’s Colorado taxable income, and that permanent rate is 4.40 percent, locked in by voter approval of Proposition 121 in 2022.1Department of Revenue – Taxation. Individual Income Tax Guide
The rate you actually pay can be lower in a given year because of the Taxpayer’s Bill of Rights, the constitutional amendment commonly called TABOR. TABOR caps how much revenue the state can keep, and surplus collections have to be returned to taxpayers. One of the return mechanisms is a temporary income tax rate reduction. The rate dropped to 4.25 percent for tax year 2024 before returning to 4.40 percent for 2025.1Department of Revenue – Taxation. Individual Income Tax Guide Surplus revenue may also come back through a sales tax refund claimed on your state return, with joint filers receiving double the single-filer amount.2Department of Revenue – Taxation. TABOR Refund
How Colorado Builds Your Taxable Income
Your starting point is your federal taxable income, the figure you reach after taking either the standard deduction or itemized deductions on your Form 1040.3Office of the Law Revision Counsel. 26 USC 63 – Taxable Income Defined From there, Colorado requires certain additions and allows certain subtractions.
Required Addbacks
If you itemized on your federal return and deducted state income taxes paid, you have to add that amount back for Colorado. The addback prevents a circular benefit where paying state tax reduces your state tax. It also applies to premiums withheld from your wages under Colorado’s Paid Family and Medical Leave (FAMLI) program if you deducted them as state taxes federally.4State Regulations | US Law | LII / Legal Information Institute. Colorado Code 39-22-104(3)(d) – State Income Tax Addback
Subtractions
Subtractions pull your Colorado taxable income below the federal starting figure. The widely used ones are covered under credits and subtractions below, including the retirement income subtraction and the CollegeInvest 529 subtraction. The full list sits on Form DR 0104AD, which the Department of Revenue updates each year.
Who Owes Colorado Tax
Your obligation depends on your connection to the state during the tax year. Colorado puts filers in three categories:
- Full-year residents lived in Colorado from January 1 through December 31 and owe tax on all income, no matter where it was earned.
- Part-year residents moved into or out of the state during the year. They owe tax on income earned while living in Colorado, plus any Colorado-source income earned while living elsewhere.
- Nonresidents never lived in Colorado during the year but received income from Colorado sources, such as wages for work performed in the state or income from a Colorado-based business.
Residency turns on where you keep your permanent home, not just where you spent the most days. Full-year residents who spend significant time outside the state still have to file a Colorado return if they are required to file federally.5Department of Revenue – Taxation. Residency Status
Part-year residents and nonresidents calculate the tax as if they were full-year residents, then reduce it using an apportionment percentage on Form DR 0104PN. That percentage is Colorado-source adjusted gross income divided by total federal adjusted gross income, and it represents the share of income Colorado can tax.6Colorado Department of Revenue – Taxation. Income Tax Topics – Part-Year Residents and Nonresidents
Credits and Subtractions That Move the Bill
A handful of credits and subtractions do most of the work in lowering what Colorado filers actually owe. Subtractions reduce your taxable income before the flat rate is applied; credits reduce the tax itself.
Pension and Annuity Subtraction
Qualifying retirement income, including pensions, annuities, and certain other retirement plan distributions, can be subtracted. Filers between 55 and 64 at the end of the tax year can subtract up to $20,000. At 65 or older, the limit rises to $24,000.7Cornell Law. Colorado Code 39-22-104(4)(f)
CollegeInvest 529 Subtraction
Contributions to a Colorado CollegeInvest 529 education savings plan come off your Colorado taxable income. For tax year 2025, single filers can subtract up to $25,400 per beneficiary; joint filers up to $38,100 per beneficiary.8Department of Revenue – Taxation. Income Tax Topics – CollegeInvest Contribution Subtraction Contributions to other states’ 529 plans do not qualify.
Earned Income Tax Credit
Working filers with low to moderate income may qualify for the Colorado Earned Income Tax Credit, calculated as a percentage of the federal EITC. For tax year 2025, the Colorado credit equals 50 percent of the federal credit. Starting in tax year 2026, that percentage drops to 25 percent.9Department of Revenue – Taxation. Income Tax Topics – Earned Income Tax Credit The credit is refundable, so you can receive it even if you owe no state income tax.
Child Tax Credit and Family Affordability Tax Credit
Colorado has two refundable credits for families. The Colorado Child Tax Credit covers children under age 6 and is available to single filers with adjusted gross income of $75,000 or less, or $85,000 for joint filers. Starting in tax year 2024, the credit is no longer tied to the federal Child Tax Credit; it is a fixed dollar amount that varies by income.10Department of Revenue – Taxation. Colorado Child Tax Credit
The Family Affordability Tax Credit reaches children under age 17 with slightly higher income limits, up to $85,000 for single filers and $96,000 for joint filers in tax year 2025. Credit amounts run from roughly $92 to $3,273 per eligible child depending on the child’s age and your income bracket.11Department of Revenue – Taxation. Income Tax Topics – Family Affordability Tax Credit Both credits are calculated on Form DR 0104CN.
Wildfire Mitigation Credit
Property owners who pay for wildfire risk reduction, such as tree thinning, brush removal, or creating defensible space, can claim a dollar-for-dollar credit. For tax years 2025 through 2027, the credit covers up to $1,000 of actual expenses per year.12Justia Case Law. Colorado Revised Statutes Section 39-22-543 – Credit for Wildfire Hazard Mitigation Expenses
Filing Deadline, Extensions, and Estimated Payments
Individual returns are due April 15 following the close of the tax year. Returns for tax year 2025 are due April 15, 2026.13Department of Revenue – Taxation. State Now Accepting 2025 Income Tax Returns
Colorado grants an automatic six-month filing extension to October 15, with no separate request required. The extension only covers filing. If you expect to owe, you still have to pay by the April deadline to avoid penalties and interest.14Department of Revenue – Taxation. DR 0158-I – Extension Payment for Colorado Individual Income Tax
If you expect to owe more than $1,000 after withholding and credits, you generally need to make quarterly estimated payments.1Department of Revenue – Taxation. Individual Income Tax Guide This usually catches the self-employed, freelancers, and people with large amounts of investment income not subject to withholding. The four installments are due April 15, June 15, September 15, and January 15 of the following year. When a due date lands on a weekend or legal holiday, payment is due the next business day.15Department of Revenue – Taxation. Individual Income Tax – Estimated Payments You do not owe estimated payments if you were a full-year resident the prior year and had no net state tax liability that year.
All individual filers use Form DR 0104. Part-year residents and nonresidents attach Form DR 0104PN.16Department of Revenue – Taxation. DR 0104 – Individual Income Tax Return (Form Only) The Revenue Online portal at tax.colorado.gov handles electronic filing, payments, and refund tracking. Electronic refunds typically arrive within three to five weeks; paper filings can take up to three months.17Department of Revenue – Taxation. Refund
What Filing or Paying Late Costs
Late filing and late payment carry separate penalties, and both can hit at once.
- The late filing penalty is 5 percent of the tax due, plus 5 percent for each additional month or partial month, capped at 20 percent.
- The late payment penalty is the greater of $15 or 5 percent of the unpaid tax for the first month, plus 5 percent for each additional month, also capped at 20 percent.
Interest accrues on unpaid tax from the original due date. For calendar year 2026, the annual rate is 8 percent if you pay before receiving a formal notice of deficiency or within 30 days of getting one. Wait longer and the rate rises to 11 percent.18Colorado.gov. Tax Topics – Penalties and Interest The Department of Revenue may reduce or waive penalties for reasonable cause, but interest generally cannot be waived.