Colorado taxes and cost of living (2026)
Colorado has a flat 4.40% income tax. A $100,000 salary is worth about $65,684 a year in national buying power after every tax and Colorado's prices, #41 of 51 (the state average is $70,397). Retiring on $50,000 a year takes about $1.36M, #42 lowest.
- State income tax
- 4.40%
- Sales tax (avg. combined)
- 7.89%
- Property tax (effective)
- 0.49%
- Cost of living
- 103.1
- US = 100
- Social Security taxed?
- No
- Median home
- $575K
Take-home pay in Colorado
Single filer, 10% of salary to a pre-tax 401(k), standard deduction, renting. All taxes include estimated sales tax.
| Salary | Federal | FICA | State + local | All-in tax rate | Take-home | In US dollars |
|---|---|---|---|---|---|---|
| $50,000 | $3,220 | $3,825 | $1,492 | 18.4% | $36,463 | $35,383 |
| $75,000 | $6,020 | $5,738 | $2,592 | 20.4% | $53,151 | $51,577 |
| $100,000 | $10,970 | $7,650 | $3,692 | 23.6% | $67,688 | $65,684 |
| $150,000 | $21,134 | $11,475 | $5,892 | 27.0% | $96,499 | $93,641 |
| $250,000 | $43,304 | $15,514 | $10,003 | 28.8% | $156,179 | $151,553 |
What it takes to retire in Colorado
Married couple, age 60, withdrawals 60% from 401(k)/IRA, 20% Roth, 20% brokerage, no Social Security yet, renting. Spending at US-average prices.
| Spending | At CO prices | Income taxes | All taxes | FI number |
|---|---|---|---|---|
| $40,000 | $41,221 | $0 | $1,041 | $1.03M |
| $60,000 | $61,831 | $521 | $2,082 | $1.56M |
| $80,000 | $82,442 | $1,837 | $3,918 | $2.11M |
| $120,000 | $123,662 | $5,769 | $8,891 | $3.24M |
Colorado tax rules at a glance
- Income tax: Colorado has a flat 4.40% income tax. Flat 4.4% on Colorado taxable income, which starts from FEDERAL taxable income (so the federal std deduction, $16,100 / $32,200 for 2026, is built in). Legislative Council's March 2026 forecast says the TABOR temporary rate reduction will not trigger for TY2025-2027. Colorado requires add-back of the federal overtime deduction (HB25-1296) and decoupled from some other OBBBA items; high-income filers also face itemized/std deduction add-backs. Nov 2026 ballot measures (Prop 136 rate cap, Amendment 87 graduated rates) could change 2027+.
- Payroll: Colorado FAMLI (employee share): 0.44% of wages up to $184,500.
- Local income tax: Only small flat occupational privilege taxes: Denver $5.75/month employee (on earnings >= $500/mo), Aurora $2/month, Greenwood Village $2/month, Sheridan $3/month, Glendale $5/month. Not percentage-based.
- Social Security: Not taxed. Partially taxed. Age 65+: Social Security fully subtracted. Age 55-64: fully subtracted if AGI <= $75,000 single / $95,000 joint (from TY2025); otherwise counts toward the $20,000 pension/annuity cap. Under 55: taxable.
- Retirement income: Pension/annuity subtraction (includes IRA/401k distributions and Social Security): up to $20,000 per person age 55-64, $24,000 age 65+. Military retirement subtraction available under 55 (limited).
- Capital gains: Taxed at the flat 4.4% (federal LTCG preference does not carry over).
- Sales tax: 2.90% state rate, 7.89% average with local taxes; groceries exempt.
Compare Colorado with
Frequently asked questions
Does Colorado have a state income tax?
Colorado has a flat 4.40% income tax. Flat 4.4% on Colorado taxable income, which starts from FEDERAL taxable income (so the federal std deduction, $16,100 / $32,200 for 2026, is built in). Legislative Council's March 2026 forecast says the TABOR temporary rate reduction will not trigger for TY2025-2027. Colorado requires add-back of the federal overtime deduction (HB25-1296) and decoupled from some other OBBBA items; high-income filers also face itemized/std deduction add-backs. Nov 2026 ballot measures (Prop 136 rate cap, Amendment 87 graduated rates) could change 2027+.
How much is $100,000 after taxes in Colorado?
A single filer earning $100,000 who puts $10,000 in a 401(k) takes home about $67,688 after federal, state and local income taxes and payroll taxes, an all-in effective rate of 23.6% including estimated sales tax.
Does Colorado tax Social Security?
No. Colorado does not tax Social Security benefits. Partially taxed. Age 65+: Social Security fully subtracted. Age 55-64: fully subtracted if AGI <= $75,000 single / $95,000 joint (from TY2025); otherwise counts toward the $20,000 pension/annuity cap. Under 55: taxable.
How much do you need to retire in Colorado?
To spend $50,000 a year (at US-average prices) with withdrawals mostly from a 401(k)/IRA, you'd need about $1.36M in Colorado using the 4% rule, after its cost of living and taxes.
Is Colorado expensive to live in?
Colorado's cost of living index is 103.1, where the US average is 100 (BEA Regional Price Parities, 2024). The median home is worth about $574,600 and median rent is $1,822 a month.
How this is calculated
- Income taxes use 2026 federal and state brackets, standard deductions and personal exemptions or credits. No itemized deductions or other credits. Local income taxes use a typical statewide rate (for example, Maryland's county taxes or New York City's); many places have none.
- Payroll taxes include Social Security (6.2% up to the wage base), Medicare, and employee-paid state programs such as California SDI or Washington's paid leave premium. A married household salary is treated as two equal earners for payroll-tax caps.
- Cost of living uses the Bureau of Economic Analysis's Regional Price Parities (2024), where the US average is 100. Spending you enter at national prices is scaled by each state's index.
- Sales tax is estimated as the average combined state and local rate on about a third of spending (more where groceries are taxed). It is shown for context but not added to costs, because the price parities already include it. Property tax applies the state's effective rate to its median home value (Census ACS 2024) if you own.
- Retirement solves for the withdrawal that covers your spending plus the taxes it triggers, using each state's treatment of Social Security, retirement-account withdrawals and capital gains, then multiplies by 25 (a 4% withdrawal rate).
- Years to FI starts from zero, adds what you save each year in that state, and grows it at a 5% real return until it reaches that state's FI number.
Estimates for comparison, not tax advice. Your actual taxes depend on deductions, credits, where in the state you live and more. Sources: BEA Regional Price Parities, Census ACS, state sales tax rates, IRS, state revenue departments (per state).