Key Points

• Colorado has a flat income tax rate of 4.55% on all taxable income, regardless of income level.
• Colorado taxpayers are required to file state income tax returns if their gross income exceeds a certain threshold, which varies based on filing status and age.
• Colorado allows taxpayers to claim a variety of deductions and credits on their state income tax returns, including a standard deduction, itemized deductions, and tax credits for child care expenses, energy-efficient home improvements, and more.
• Colorado’s state tax laws also include provisions for property taxes, sales taxes, and estate taxes, which can impact a taxpayer’s overall tax liability.
• Taxpayers in Colorado can take advantage of various tax planning strategies to minimize their tax liability, such as contributing to retirement accounts, utilizing tax-advantaged investment accounts, and timing their income and expenses for maximum tax efficiency.

It’s that time of year again – tax season. Whether you’re a small business owner or an individual filer, you may be feeling the stress of getting everything in order. But don’t worry, we’re here to help. This guide provides a comprehensive overview of Colorado’s income tax requirements. We’ll cover everything from filing deadlines to tax rates, so you can be confident you’re meeting your obligations come tax time.

How much is colorado state income tax?

State income tax in Colorado is currently 4.4% of your taxable income. This means that if your taxable income is $100,000, you’ll pay $4,400 in state income taxes. 

 

What is the income tax rate in Colorado? 

The new Colorado income tax rate is 4.40%, beginning in the 2022 tax year. In 2020, proposition 116 reduced the income tax rate to 4.55%. In 2019, the Colorado income tax rate was temporarily reduced to 4.50%, because a TABOR refund mechanism was triggered. From 2000 to 2018, the Colorado income tax rate was 4.63%.

How to calculate your Colorado income tax

If you’re a Colorado resident, you’ll need to file a state income tax return in addition to your federal return. Here’s how to calculate your Colorado income tax:

First, determine your filing status. Are you single, married filing jointly, head of household, or married filing separately? This will affect the tax brackets you fall into and the standard deduction amount you’re entitled to.

Next, calculate your taxable income. This is your total income from all sources (wages, interest, dividends, etc.) minus any adjustments (like Student Loan Interest Deduction or IRA contributions).

Then, use the Colorado Tax Tables to determine your tax liability. Find your taxable income amount on the left side of the table and look across to find your corresponding tax amount.

Finally, compute any tax credits you may be eligible for. Credits can lower your tax bill dollar-for-dollar, so be sure to take advantage of them if you qualify! The Senior citizen credit and Head of Household credit are two common credits in Colorado.

Now you know how to calculate your Colorado income tax! For more information on state taxes in Colorado, check out our comprehensive guide.

What are the Colorado income tax deductions?

When it comes to Colorado income tax deductions, there are a few key items that you should be aware of. For starters, the state allows you to deduct your federal income taxes from your state income taxes. This deduction can be taken whether you itemize your deductions or take the standard deduction on your federal return.

In addition, Colorado allows you to deduct up to $4,000 in retirement income from your state-taxable income. This deduction is available for both traditional and Roth IRA distributions, as well as pension and annuity payments. If you’re married and filing jointly, each spouse can take this deduction for a total of up to $8,000 in retirement income exclusion.

Finally, Colorado offers a property tax deduction for qualified taxpayers. To be eligible, you must have paid property taxes on your primary residence in the state of Colorado during the tax year. The maximum amount that can be deducted is $ 637 per person ($ 1,274 for married couples filing jointly).

How to file your Colorado income tax return?

In Colorado, you have several options for filing your income tax return. You can use the federal government’s website, an online tax service, or download and print forms from the state website.

If you choose to file your return electronically, you will need to create an account on the Federal government’s website. Once you have logged in, you will be able to enter your personal information and begin filling out your return.

If you would prefer to use an online tax service, there are many reputable companies that offer this service. Most of these companies will charge a fee for their services, but they can often help you maximize your tax refund and minimize your tax liability.

Finally, if you would prefer to download and print forms from the state website, you can do so by visiting the “Forms and Instructions” page. From here, you can select the form that best suits your needs and print it out. Once you have completed the form, you will need to mail it to the Colorado Department of Revenue.

When is the Colorado income tax due?

If you are an individual with Colorado taxable income, your income tax return is due on April 15. If you are filing a joint return, your spouse’s signature is also required. If you cannot file by the due date, you can get an automatic six-month extension of time to file by filing Form 104EP. However, even if you get an extension, you must pay any tax that is due by April 15.

Conclusion

We hope this guide has been helpful in understanding the basics of Colorado income tax. While there is a lot of information to take in, it’s important to remember that you don’t have to go through the process alone. If you need help, there are many resources available, including tax professionals and accountants. With a little bit of research and planning, you can be sure to stay on top of your Colorado income taxes and avoid any surprises come tax time.