Colorado's flat 4.4% income tax is one of the lowest in the mountain west — and TABOR means excess revenue gets refunded back to you. See exactly what you take home.
Colorado taxes the same income base as the federal government — after the federal standard deduction and pre-tax deductions like 401(k) and health insurance. There is no separate Colorado standard deduction. Every dollar exempt from federal tax is also exempt from Colorado tax. TABOR (Taxpayer's Bill of Rights) caps state revenue growth and refunds excess to taxpayers; the 2026 rate remains 4.4%. Denver has no traditional local income tax but does levy a small Occupational Privilege Tax ($5.75/month for most employees).
Estimates only. Colorado flat rate: 4.4% on federal taxable income. Denver OPT ($69/yr) and TABOR rebates not modeled. Consult a tax professional for advice.
| Gross Pay (this check) | $0.00 |
| Federal Income Tax | −$0.00 |
| Colorado State Tax (4.4%) | −$0.00 |
| Social Security (6.2%) | −$0.00 |
| Medicare (1.45%) | −$0.00 |
| Net Take-Home Pay | $0.00 |
Colorado has a flat 4.4% state income tax rate for 2026. This applies to your federal taxable income — after the federal standard deduction ($16,100 single / $32,200 married / $24,150 HOH) and any pre-tax deductions. Colorado has no separate state standard deduction. The 4.4% rate has been stable since 2022 when it was reduced from 4.55%.
Four taxes come out of a Colorado paycheck: federal income tax (progressive brackets from your W-4), Colorado state income tax (4.4% flat), Social Security (6.2% up to $184,500), and Medicare (1.45% on all wages). Denver residents also pay a small Occupational Privilege Tax of $5.75/month ($69/year) if they earn $500 or more in that month. Other Colorado cities — including Aurora, Glendale, and Greenwood Village — have similar small OPT taxes.
Colorado starts from your federal taxable income — the same number on your federal return after applying the standard deduction or itemized deductions and subtracting pre-tax deductions like 401(k) contributions. Colorado then applies the flat 4.4% rate to that amount. This means every dollar that is exempt from federal income tax is also automatically exempt from Colorado income tax. No separate Colorado form or calculation is needed to claim the standard deduction.
TABOR (Taxpayer's Bill of Rights) is a Colorado constitutional amendment that caps state revenue growth. When state revenue exceeds the TABOR limit, the surplus must be refunded to taxpayers — historically through flat rebate checks (Colorado Cash Back) or reduced tax rates. For 2026, the 2025 revenue surplus was approximately $293 million, below the threshold needed to trigger a rate reduction. TABOR refund eligibility requires filing a Colorado income tax return.
Denver does not have a traditional percentage-based income tax, but it does levy an Occupational Privilege Tax (OPT). Employees earning $500 or more in a calendar month pay $5.75/month ($69/year). Employers also pay $4/month per qualifying employee. Several other Colorado cities have similar small OPT taxes: Aurora ($2/month), Glendale ($10/month), and Greenwood Village ($3/month). These are small, flat amounts — not tied to income level.
Colorado's 4.4% flat rate is competitive in the mountain west. Arizona is lower at 2.5% (the lowest in the US), while Utah has a similar 4.65% flat rate. Nevada and Texas have no state income tax, making them more attractive on paper for high earners. New Mexico uses a progressive system up to 5.9%. Compared to California (up to 13.3%), a Colorado worker earning $100,000 saves roughly $5,000–$7,000 per year in state income tax.
Yes. The One Big Beautiful Bill (2026) exempts overtime premiums and up to $25,000 in tips from federal income tax only. Colorado still taxes overtime and tip income at the standard 4.4% state rate. Use our Overtime Tax Calculator to see your combined federal savings and remaining Colorado state tax on overtime pay.
Pre-tax 401(k) contributions reduce both your federal and Colorado taxable income simultaneously — since Colorado starts from federal taxable income, any deduction that lowers your federal base also lowers your Colorado base dollar-for-dollar. Contributing $500/month to a 401(k) saves roughly $375–$450/month in federal taxes plus an additional $22/month in Colorado state taxes, while growing your retirement account by the full $500.