Colorado state income tax
Colorado has a state income tax. It is flat, with a top marginal rate of 4.4%. Single flat rate of 4.40% applied to federal taxable income (with Colorado additions/subtractions), per C.R.S. 39-22-104. This base rate has applied since tax year 2022. A TABOR-triggered temporary-reduction mechanism (C.R.S. 39-22-627) cut the rate to 4.25% for tax year 2024 only; it reverted to the 4.40% base rate for tax year 2025 and later. Two bills that would have permanently cut the rate further, HB24-1065 (to 4.0%) and SB25-138 (to 4.25%), were both postponed indefinitely in committee and never became law. Capital gains are taxed as ordinary income (no special lower rate).
Does Colorado have a state income tax?
Yes. Colorado taxes individual income on a flat schedule topping out at 4.4%. Single flat rate of 4.40% applied to federal taxable income (with Colorado additions/subtractions), per C.R.S. 39-22-104. This base rate has applied since tax year 2022. A TABOR-triggered temporary-reduction mechanism (C.R.S. 39-22-627) cut the rate to 4.25% for tax year 2024 only; it reverted to the 4.40% base rate for tax year 2025 and later. Two bills that would have permanently cut the rate further, HB24-1065 (to 4.0%) and SB25-138 (to 4.25%), were both postponed indefinitely in committee and never became law.
| Item | Colorado |
|---|---|
| State income tax | Yes, flat |
| Top marginal rate | 4.4% |
| Capital gains | Taxed as ordinary income, up to 4.4% |
| State sales tax | 2.9% (plus local) |
| Avg. property tax rate | 0.5% of home value |
| Estate / inheritance tax | None |
How does Colorado tax capital gains?
Colorado has no separate, lower rate for capital gains. They are taxed as ordinary income at the same rates as your wages, up to 4.4%, on top of federal capital gains tax. See how capital gains tax works in 2026.
What about retirement income in Colorado?
Retirement income is taxed differently from wages in many states. For how Colorado treats Social Security, pensions, and 401(k)/IRA withdrawals, see Colorado retirement taxes.
Sources
- Colorado income tax rates and brackets: Colorado Department of Revenue / Taxation.
- Colorado capital gains treatment: Colorado tax authority.
- Colorado sales tax: Colorado Department of Revenue.