Colorado retirement income tax (2026)

How Colorado taxes retirement income

Colorado taxes income at one flat rate, 4.4%, whatever the amount and filing status^[1].

Before the rate applies, the simulator subtracts a standard deduction of $32,200 on a joint return ($16,100 single), the same amount as the federal standard deduction. It applies no personal exemption.

Social Security benefits are exempt from Colorado income tax: none of the benefit enters the state base, as in 22 of the 24 states covered here that tax income.

From age 65, each person can exclude up to $24,000 a year of IRA, 401(k) and pension distributions, so a couple can exclude up to $48,000 when each spouse has that much. In the worked examples the couple’s distributions are split evenly between the spouses, so each spouse’s cap applies to half.

Long-term capital gains and qualified dividends are taxed as ordinary income, at the same rates.

Put together, the example couple below owes $0 in Colorado, the lowest bill among the 24 states covered here that tax income, shared with 7 other states.

2026 rate

One rate, 4.4%, applies to all taxable income for every filing status; there are no brackets.

Worked example

A retired couple, both 67, filing jointly, with $48,000 of Social Security, $40,000 of IRA withdrawals and a $20,000 pension. The figures are computed when the page is built, by the same state-tax function the simulator runs.

The couple’s next $1,000 of IRA withdrawals would add $0 of Colorado tax.

A single retiree, 67, with half those amounts ($24,000 of Social Security, $20,000 of IRA withdrawals, a $10,000 pension) owes $0, 0.00% of gross income.

Age matters here: if both spouses were 63, below the exclusion age of 65, the same income would owe $1,223, which is $1,223 more than at 67.

As IRA withdrawals rise

The same couple, with Social Security and the pension unchanged, taking more from their IRAs (a larger withdrawal, a required minimum distribution or a Roth conversion all count as distributions here):

Neighbouring states

The example couple’s state tax in Colorado and in the neighbouring states covered here, same income and ages:

Against Colorado, the couple would pay more in Utah (+$4,450), Arizona (+$750); the same in Wyoming. With $200,000 of IRA withdrawals instead of $40,000, they would owe $6,151 in Colorado, against Wyoming ($0), Utah ($11,606), Arizona ($4,750).

What this page leaves out

What the simulator does and does not handle for Colorado, item by item^[1]:

• Flat 4.4% on federal taxable income (the federal married filing jointly standard deduction, taken from the federal figure, $32,200 for 2026; the tax years 2023 and later addback of deductions above $12,000/$16,000 for federal AGI of $300,000+ is not modeled).
• Social Security fully subtractable at 65+ (55–64 income-capped), so modeled exempt.
• $24,000/person pension/annuity subtraction at 65+ ($20,000 at 55–64 ignored).
• Temporary TABOR rate reductions ignored.

In every state the simulator also leaves out credits, itemized deductions, deductions that phase out with income, local income taxes, surtaxes and any deduction for federal tax paid. It holds state amounts fixed and does not index them for inflation.

See it over a full plan

Related

• All 33 states compared
• State taxes in retirement: the exemptions that change the map
• The Social Security tax torpedo
• The RMD bomb: how pre-tax savings become forced income
• Roth ladder: how a Roth conversion ladder works
• Taxes in retirement: the topic guide
• Marginal-rate map (federal and state tax on the next dollar)