State retirement tax · Colorado
Retirement tax rules for Colorado residents (2026 guide)
Colorado taxes income at a flat 4.4% but carves out a lot for older residents: at 65+ all Social Security plus up to $24,000 of other retirement income per person is deductible, and long-time homeowners 65+ get half of the first $200,000 of their home's value exempt. It's still one of the 8 states that tax Social Security — but only for some filers under 65.
By Mindaugas Laucius · Last reviewed October 21, 2026
Rate on retirement income
1.76%*
Taxes Social Security?
Yes
Approx. tax on $90k retirement income
$1,584
Pension carve-outs
Yes
Quick figures: a single filer with $90,000 of income, $30,000 of it Social Security.
The pension and annuity subtraction
At 65 and older, each taxpayer can subtract all federally taxable Social Security plus up to $24,000 of pension, annuity, IRA and 401(k) income. From 55 to 64, Social Security is fully deductible if AGI is $75,000 or less (single) or $95,000 or less (joint); above that, the combined subtraction for Social Security and other retirement income is capped at the lesser of $20,000 or your taxable retirement income.
Source: Colorado DOR — Social Security, pensions and annuities ↗
Senior property tax exemption
If you're 65+ on January 1 and have owned and lived in your home as your primary residence for at least 10 consecutive years, 50% of the first $200,000 of its actual value is exempt from property tax. Apply with your county assessor.
Source: El Paso County Assessor — senior property tax exemption ↗
Sales tax
The state rate is 2.9%, but city, county and district taxes stack on top, so combined rates vary widely.
Worked examples
A single retiree at 67
- $30,000 of Social Security: fully deductible at 65+.
- $50,000 of IRA withdrawals − $24,000 subtraction = $26,000.
- $26,000 × 4.4% = $1,144.
About $1,144 of Colorado tax.
A couple, both 66
- $90,000 of IRA and pension income − 2 × $24,000 = $42,000.
- $42,000 × 4.4% = $1,848.
About $1,848, with all Social Security deducted.
Retired at 60 with AGI above $75,000
- The subtraction for Social Security and other retirement income combined is capped at $20,000.
- Each $10,000 of retirement income above the cap × 4.4% = $440.
$440 per $10,000 over the cap — the reason Colorado counts as taxing Social Security for some.
Recent and pending changes
- 2025: Social Security became fully deductible for filers 55–64 with AGI up to $75,000 single / $95,000 joint.
Run your own numbers — pick Colorado in the calculator’s Taxes tab for a year-by-year estimate. Or compare all 50 states and DC.
Thinking about a move? The free state-to-state retirement tax comparison puts Colorado next to any other state on your own income.
Colorado questions
Does Colorado tax Social Security at 65?
No — at 65 and older, all federally taxable Social Security is deductible. The tax applies only to some filers aged 55–64 above the income limits.
Is the $24,000 subtraction per person?
Yes. Each spouse aged 65+ can subtract up to $24,000 of their own retirement income.
Do I have to have owned my home for 10 years for the senior exemption?
Yes, as owner and occupant for 10 consecutive years before January 1, with limited exceptions for surviving spouses.