Colorado Paycheck Calculator & Income Tax Rates (2026)

Colorado taxes all taxable income at a single 4.4% rate. The only thing that changes your bill is the deduction that comes off the top first.

With a flat state rate the marginal state rate is constant, but the overall effective rate still rises because federal brackets are progressive.

Colorado's joint deduction are the same as single brackets, so the marriage effect here comes from the deduction and the federal side. On $100,000 a joint return keeps $81,727 versus $75,433 for a single filer.

Colorado has taxed income at a single flat rate since 1987, and voters have twice cut it at the ballot box: Proposition 116 lowered the rate from 4.63% to 4.55% for 2020, and Proposition 121 cut it to 4.4% beginning in tax year 2022. The rate is 4.4% for 2026. A separate mechanism can shave it further in any given year — when the state collects more than the Taxpayer's Bill of Rights allows, part of the refund is delivered as a temporary rate cut, which is how filers paid 4.25% for tax year 2024. Colorado is one of the few states that starts its return from federal taxable income rather than adjusted gross income, so the federal standard deduction and most federal itemized deductions flow through automatically. High earners see one clawback: itemized deductions are capped for taxpayers with adjusted gross income above $300,000, and state income tax deducted federally is added back.

Because Colorado begins with federal taxable income, the federal standard deduction ($16,100 single, $32,200 joint for 2026) or federal itemized deductions serve as the state's own; there is no separate state personal exemption, and itemized deductions are capped for high earners. Credits are generous at the low end: a state earned income credit worth a large share of the federal credit (the percentage floats with the TABOR surplus), a refundable child tax credit for families with children under six, and a family affordability credit enacted in 2024.

No Colorado city taxes a percentage of income, but five municipalities charge a flat occupational privilege tax on anyone who works within city limits: Denver ($5.75 a month from the employee and $4 from the employer, on anyone earning at least $500 a month), Aurora ($2 a month), Glendale ($5), Greenwood Village ($2) and Sheridan ($3). The amount is trivial — $69 a year in Denver — and is withheld by the employer.

Colorado's 2.9% state sales tax is the lowest non-zero rate in the country, but the figure is misleading: home-rule cities, counties and special districts layer on some of the heaviest local rates anywhere, bringing Denver to about 9.65% after voter-approved increases took effect in 2025 and the statewide average to roughly 7.8%. Groceries and prescription drugs are exempt from the state tax, though some cities tax food. Home-rule cities collect their own sales taxes directly, a headache for businesses.

Colorado's residential property taxes are among the lowest nationally, with an effective rate around 0.5% of market value, because homes are assessed at a small fraction of value — roughly 6–7% for 2025–2026 after cuts that followed the 2020 repeal of the Gallagher Amendment. Rapid appreciation in Denver and the mountain towns has pushed bills up regardless. Homeowners 65 and older who have lived in their home ten years can exempt 50% of the first $200,000 of value.

Colorado still taxes Social Security for some filers, but the net is narrow. Retirees 65 and older can subtract all federally taxable Social Security since tax year 2022; filers 55–64 with adjusted gross income up to $75,000 single or $95,000 joint got the same full subtraction starting in tax year 2025. Everyone else falls under the pension and annuity subtraction: up to $24,000 of retirement income (Social Security, pensions, IRA and 401(k) withdrawals combined) for those 65 and older, $20,000 for ages 55–64. Military retirement pay is covered by the same subtraction and, for retirees under 55, by a separate exclusion of up to $15,000. Amounts above the subtractions are taxed at the flat 4.4%.

Colorado is kindest to high earners with children and to older retirees. A $250,000 W-2 household pays a flat 4.4% with no local surcharge, and dual-income couples face no marriage penalty because the deduction doubles and the rate never changes. Retirees 65 and older can shelter $24,000 each of pension and IRA income and all of their Social Security. Remote workers owe Colorado 4.4% on wages earned while living there wherever the employer sits, and Colorado has no reciprocity agreements. The pain points are housing costs along the Front Range and combined sales taxes approaching 10% in Denver.

The median household income in Colorado is $68,000, which is $54,329 a year ($4,527 a month) after all taxes. That is close to the national median. After adjusting for cost of living, the purchasing power of that take-home is equivalent to $51,742 in an average-cost area.

Colorado ranks #21 of 50 for raw take-home pay and #40 for cost-adjusted purchasing power at $100,000. The 19-place gap between the two reflects an above-average cost of living that erodes what the take-home actually buys. The best state (Alaska) leaves $79,125; the worst (Oregon) leaves $70,932. Colorado is $3,692 behind the leader.

Colorado Tax Questions, Answered

Compare Colorado with Other West States

Specific Salaries in Colorado