The income tax rate in Colorado for 2023 is 4.4%, and it is a flat tax rate, meaning that no matter what level of income you earn in Colorado, the income tax rate remains the same.
There are a total of eleven states in the U.S. that try to keep things simple when it comes to state income tax rates. The income tax rate in Colorado is one of the states that lock in their income tax rate regardless of whether you earn $20,000 a year or $200,000+ per year.
The attraction to move from another state or relocate from another country to Colorado is very appealing for many reasons, but the fact that the income tax rate in Colorado is fixed at 4.4% in 2023 is even more enticing.
Taxes are a certainty that, legally, you must pay, and we are going to specifically cover the Colorado state income tax rate when you take into consideration the other taxes you will be liable to pay on your income if you reside in Colorado.
Colorado State Income Tax Rate
We are not trying to dampen anyone’s hopes of only paying 4.4% income tax in Colorado. But, even though the Colorado state income tax rate is fixed, you will still have to pay other taxes on your income whether you work for someone else or own a Colorado business or franchise.
If you live and work in Colorado, your paycheck will reflect 4.4% income tax deductions, regardless of the amount. However, you will also pay other federal taxes that will affect your take-home pay.
Likewise, if, as a business owner, you pay yourself a salary through payroll or take a monthly, quarterly, or annual distribution/dividend from the net profit your business generates, you will still be liable for some tax.
Having the Colorado state income tax rate fixed at 4.4% in 2023 is great. It is also simple and transparent. Since the US government is made up of local, state, and federal jurisdictions, you can rest assured that in addition to the fixed rate of income tax in Colorado, the government is going to tax you in one form or another on your income.
If you would like to see the state income tax rates in Colorado for previous years, we have included a handy table below that covers the historical rates.
|Year||Income Tax Rate||Income Tax Brackets||Lowest to Highest Income Brackets|
|2023||4.4%||Fixed Rate||All Income Levels|
|2022||4.4%||Fixed Rate||All Income Levels|
|2021||4.63%||Fixed Rate||All Income Levels|
|2020||4.55%||Fixed Rate||All Income Levels|
|2019||4.5%||Fixed Rate||All Income Levels|
|2018||4.63%||Fixed Rate||All Income Levels|
The goal of the information we are providing you with is to give you an overview of the likely tax you will pay on your earnings in Colorado.
Multiple factors affect your tax liability, such as being single or married, having children and/or dependents, and other circumstances, and there is never a one-size-fits-all scenario, even though the Colorado state income tax rate is fixed. You should always consider seeking the help of a Colorado tax professional when filing taxes.
One thing you must always remember is that a flat 4.4% income tax rate in Colorado does not mean that you will not be liable to pay other taxes on your earnings – it might just mean you will pay less than if you lived or worked in another state with a higher income tax rate.
You should also be aware that while the Colorado state income tax rate is a flat rate regardless of your income level, you are still liable to pay Colorado’s sales tax which is one of the lowest in the US at just 2.9%.
However, since numerous different county and city sales tax rates apply based on where you live in Colorado, the sales tax rate, combined with county and local sales tax, can be as high as 11.2%.
The average statewide is in the 7%-8% range. Property taxes for homeowners in Colorado are favorable, and it has one of the lowest property tax rates in the US, with an average effective rate of just 0.55%.
Colorado Income Tax Calculator
Although the Colorado income tax rate is 4.4% which is a flat rate regardless of your income level, we have provided you with various scenarios of the tax you will pay on your income as a resident of Colorado.
The following Colorado income tax calculator should be used for approximation purposes and does not represent legal authority or the exact amount of Colorado income tax (including Federal and FICA tax) that you will be liable for – it is just a guide based on information from the IRS and other sources.
The range we have provided in the Colorado income tax calculator is from $1,200 per month, or $14,400 per year, to $12,000 per month, or $144,000 per year.
The gross monthly wage of $2,366 or $28,392 per year in the table represents the minimum wage in Colorado in 2023 of $13.65 per hour. A standard full-time position in the US typically includes a 40-hour work week that translates to 2,080 hours worked in a year (40 hours x 52 weeks).
Finally, if you work in Aurora, Denver, or Greenwood Village, you will also have to pay local taxes. These taxes are also flat rates. If you work in Aurora, $2 is taken out of your pay every month if you earn over $250.
In Denver, you’ll pay $5.75 per month if you make more than $500, and in Greenwood Village, you will pay $4 every month if you earn more than $250. You can find out more by visiting the Colorado Department of Revenue’s website here: CDOR.
|Monthly Gross Wage||FICA Taxes (7.65%)||Federal Income Tax||Income Tax rate (4.4%)||Net Monthly Income||Annual Gross Income||Net Annual Income|
Colorado Income Tax Brackets
The above table provides you with a broad range of different Colorado income tax bracket scenarios. The income tax calculator used in the table above is based on a single taxpayer (not married) claiming one personal exemption.
The Colorado State income tax rates in the table reflect almost a worst-case scenario for a US taxpayer because those who are married and have dependents can typically take advantage of other deductions, which would effectively make the federal income tax you pay less than what you see in the table.
Again, you should consult a professional when calculating your Colorado tax liability since other factors may affect the income tax you pay on your earnings in Colorado.
The Colorado income tax bracket is fixed at 4.4%, as noted in the table, but you are still responsible for paying Social Security (6.2%) and Medicare (1.45%), totaling 7.65%.
You are also responsible for paying Federal Income Tax regardless of whether you reside in Colorado with its low and fixed 4.4% income tax rate.
Colorado Department of Revenue (CDOR) Contact Details
Other contact details for the CDOR
PO Box 17087
Denver, CO 80217-0087
General Tax Information: (303) 238-7378
Collections (assists with payment arrangements and garnishments): (303) 205-8291
Discovery: (303 )205-8292
Field Audit: (303) 355-0400