Colorado State Income Tax: Rates and Who Pays in 2022-2023
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Colorado’s income tax rate is 4.4%. It is one of 11 states with a flat income tax.
Colorado state income tax returns were due April 18, 2023. If you applied for a federal tax extension by tax day, Colorado automatically granted you a six-month state tax extension as well.
Taxpayers who have their state tax return extended should still pay at least 90% of their tax bill to avoid incurring penalties and additional interest.
Colorado state income tax rates and tax brackets
For tax year 2022 (taxes filed in 2023), Colorado’s state income tax rate is 4.4%. Previously, Colorado taxed income at a fixed rate of 4.55%, but the passage of Proposition 121 lowered the rate by 0.15% for tax years 2022 and forward.
Colorado’s flat-tax approach is different from how the federal government and several other states collect taxes. Instead of taxing chunks of a taxpayer’s income at progressively higher rates depending on how much they make, the state levies a flat 4.4% on taxable income.
Colorado generally uses a taxpayer’s federal taxable income as a starting point for calculating Colorado taxable income. However, certain state-specific tax credits as well as Colorado’s rules for additions and subtractions to income can affect tax liability.
What is Colorado’s standard deduction?
Unlike some other states, Colorado does not have a state standard deduction. This is because a taxpayer’s federal taxable income — which already takes into account the application of the federal standard deduction or the taxpayer's itemized deductions — is generally used as a basis for calculating taxes owed to Colorado.
Single and joint filers who make over a certain amount of income, however, may also be asked to add back in a portion of their federal itemized deductions when figuring their Colorado taxable income. See the Individual Income Tax Guide on the Colorado Department of Revenue’s website for more information.
Do I have to pay Colorado state income tax?
Colorado residents and part-year residents who file a federal tax return typically also need to file a Colorado state income tax return. Nonresidents who earn Colorado-sourced income may also have a filing obligation.
If your Colorado residency type is ...
Colorado taxes this part of your income
All income from all sources inside and outside Colorado.
All income received while a resident, plus income from Colorado sources while a nonresident.
Income from Colorado sources.
Am I a resident for Colorado income tax purposes?
There are three types of residency statuses when it comes to Colorado state tax. They determine what portion of your income the state will tax.
Resident status rules
Colorado generally considers you a resident for tax purposes if:
You have a permanent home in Colorado to which you return after traveling from the state. This home could be a rental, condo, house or mobile home; or
You maintain a permanent home in Colorado and spend more than six months (182 days) of the year in the state.
Students who attend college in a state outside Colorado, do not intend to establish residency in that state post-graduation or are supported by parents who live in Colorado while in school are considered residents of Colorado by the state taxing authority — regardless of whether they voted or applied for a driver’s license or ID in the state where they attend college.
Special rules may apply to military personnel or service members and to those who file jointly with someone who is a resident of Colorado, even if they themselves are not. The Colorado Department of Revenue’s website has the details.
Residents of Colorado file Form DR 0104.
Part-year resident status rules
If you lived in Colorado when the year started but then moved to another state, you may be considered a part-year resident for Colorado tax purposes. Likewise, if you lived in another state when the calendar year started but then moved to Colorado and took steps to establish residency, you’re also probably considered a part-year resident.
Colorado part-year residents file Form DR 0104 and corresponding schedule DR 0104PN.
Nonresident status rules
Colorado defines nonresidents as people who do not live in Colorado but may have briefly worked in Colorado or made income from Colorado-based sources.
If you’re a nonresident with taxable Colorado income, you may have a state filing obligation if you also must file a federal return. Nonresidents file Form DR 0104 and use Form 0104PN to help calculate Colorado tax liability.
» Need help? How to find a tax preparer near you
Colorado sales tax
Colorado’s statewide sales tax is 2.9%. This tax applies to items such as the sale of prepared food and drinks, goods or merchandise, and hotel rentals or other accommodations. It doesn’t apply to things such as groceries or medications, which are tax-exempt.
Counties and cities can also levy a local sales tax on top of the state one, bringing the total sales tax up to 11.2% in some areas. According to the Tax Foundation, the average local tax rates across the state hover around 4.88%, making Colorado one of five states with the highest local average sales tax in the nation.
5 things to know about Colorado income tax
Tax software will do your state taxes, though sometimes for an extra fee. You can also check whether you qualify for an IRS Free File program that covers Colorado state tax.
Colorado offers several refundable and nonrefundable tax credits modeled after federal incentives, including a state-specific child tax credit, an earned income tax credit and a residential energy credit.
If you can’t afford your tax bill, Colorado offers payment plans that you can set up online or over the phone.
Colorado also has an offer-in-compromise program, which might allow you to pay less than you owe.
If you’re curious about where your Colorado state tax refund is, check the status of your state refund.
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