State retirement tax · Colorado
Retirement tax rules for Colorado residents (2026 guide)
Colorado's effective income-tax rate at retirement-bracket income is approximately 4.40%. Here's what it taxes, what it exempts, and how the worked numbers shake out.
Last reviewed July 17, 2026
Editorial review pending — see editorial process
Rate on retirement income
1.76%*
Taxes Social Security?
No
Approx. tax on $90k retirement income
$1,584
Pension carve-outs
Yes
*Effective rate for a single filer with $90k of income ($30k of it Social Security), after Colorado exempts Social Security and excludes the first $24,000 of retirement income per person. A retiree whose withdrawals stay under the exclusion owes about $0; a married couple excludes roughly twice as much. See the note below for the age rules.
Colorado's headline income-tax rate is about 4.40%, but retirees rarely pay it on their full income. Colorado excludes the first $24,000 of retirement income per person, and Social Security is fully exempt — so a retiree whose withdrawals stay under that exclusion owes close to $0, and one above it pays the rate only on the excess. A married couple can exclude roughly twice as much. The state note below has the age rules and exactly what qualifies.
What Colorado taxes (and what it doesn’t)
Colorado taxes 401(k)/IRA withdrawals and pension income at the state's rate — but only AFTER excluding the first $24,000 of retirement income per person, and Social Security is fully exempt. So a retiree whose taxable withdrawals fall under the exclusion pays $0 in state income tax; above it, the roughly 4.40% rate applies to the excess. Taxable brokerage, rental, and wage income don't qualify for the exclusion. See the state note for the age requirement and specifics.
State-specific note
Flat 4.4%. Colorado subtracts up to $24,000 of pension and annuity income (incl. IRA/401(k) distributions) PER PERSON at age 65+, and Social Security is fully exempt for 65+ — so a typical retiree owes little or nothing. (A 2025 bill, SB25-136, would remove the cap for 55+ starting 2026, but that expansion is not yet confirmed in effect.) Income above the subtraction is taxed at 4.4%.
A worked example
Worked example. A Colorado retiree with $60,000 of pension and IRA withdrawals plus $30,000 of Social Security: Social Security is exempt, and Colorado excludes the first $24,000 of retirement income per person — so only about $36,000 is taxed at roughly 4.40%, on the order of $1,584/year ($132/month). A married couple can exclude about twice as much, often owing $0.
Should you relocate?
Whether to relocate from Colorado for tax reasons depends on the size of your retirement income and the destination state. The math typically favors staying put unless you're at $1M+ household income or planning a 20+ year retirement that amortises the move costs.
See how Colorado state tax shapes your retirement plan
The calculator's Taxes tab uses the 4.40% effective rate above and the SS-exemption flag automatically. Run your specific numbers and see the year-by-year tax forecast.
Run my numbersFrequently asked
Does Colorado tax my Social Security?
No. Colorado fully exempts Social Security benefits. You'll only owe state tax on other retirement income above the exclusion described below.
How much retirement income can I exclude in Colorado?
Up to $24,000 per person — about $48,000 for a married couple where both qualify. It covers pension and IRA/401(k) income; see the state note above for the age requirement and exactly what counts. Income above the exclusion is taxed at about 4.40%.
What's the effective state tax rate on my retirement income in Colorado?
Much lower than the headline rate for most retirees. On $90,000 of income (with $30,000 of it Social Security), a single filer would owe roughly $1,584 — an effective rate of about 1.76% — because Social Security is exempt and the first $24,000 of other retirement income is excluded. A retiree whose withdrawals stay under the exclusion owes $0.
Should I relocate to Colorado for retirement?
It depends on the size of your retirement income, the destination state, and your moving costs — the state-tax differential alone is rarely decisive for normal-income retirees. Colorado's exclusion already zeroes out state income tax for many retirees, so property and sales taxes are usually the numbers that actually differ between states.
Does this apply to property tax too?
No — this page covers state INCOME tax only. Property and sales taxes vary widely and property tax is set locally; check your county assessor for your own number.
Primary sources
Colorado-specific rules are sourced from the state revenue department's own publications (listed first); the rate table below is cross-checked against the national roundups. We re-verify annually.
Related reading
Oklahoma retirement tax rules
Comparable effective rate on retirement income (4.40% vs 4.40%).
Oregon retirement tax rules
For perspective from a different tax tier.
Utah retirement tax rules
An example of a state that DOES tax Social Security.
Run my numbers
The calculator's Taxes tab uses the same per-state effective rate.
How the Monte Carlo actually works
2,000-word methodology page — covers state tax modelling.