Retiring in Colorado: how your income is taxed
Colorado is fairly tax-friendly for retirees. On a typical retirement income it ranks #33 of 51 for the lowest state income tax.
The rules in Colorado
- Social Security: At 65 and older, all federally taxable Social Security can be subtracted. At 55 to 64, all of it can be subtracted if AGI is $75,000 or less (single) or $95,000 or less (joint); above that, it counts toward the $20,000 pension and annuity subtraction. Under 55, it is taxed as it is federally. Social Security you subtract uses up room under the pension and annuity limit.
- Pensions: The pension and annuity subtraction is up to $24,000 per person at 65 and older and $20,000 at 55 to 64. The same limit covers 401(k) and IRA withdrawals, and any Social Security you subtract counts against it. Bills to remove the limits did not pass, so they still apply in 2026. Military retirement pay: under 55, up to $15,000 can be subtracted (2022 to 2028); at 55 and older it falls under the regular pension limit.
- 401(k), 403(b) and IRA withdrawals: 401(k) and IRA withdrawals fall under the same subtraction as pensions ($24,000 per person at 65 and older, $20,000 at 55 to 64), which is also reduced by any Social Security subtracted.
- At 65 and older: Colorado starts from federal taxable income, so the extra federal standard deduction at 65 and the federal senior deduction (up to $6,000 per person, 2025–2028) carry over to the state return.
Calculate your Colorado retirement taxes
State income tax in Colorado: $625 a year
In Colorado, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Colorado you'd pay about $625 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $65,039 (7.1% total).
Colorado ranks #33 of 51 for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Colorado
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $625 | $0 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $3,493 | $1,694 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Colorado's main exclusions and may differ for income-tested credits.
States with lower retirement taxes
Moving to Colorado in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Colorado come from (IRS migration data, 2022–2023).
- Texas to Colorado
- California to Colorado
- Florida to Colorado
- Arizona to Colorado
- Illinois to Colorado
- New York to Colorado
Frequently asked questions
Does Colorado tax Social Security?
Partly taxed. At 65 and older, all federally taxable Social Security can be subtracted. At 55 to 64, all of it can be subtracted if AGI is $75,000 or less (single) or $95,000 or less (joint); above that, it counts toward the $20,000 pension and annuity subtraction. Under 55, it is taxed as it is federally. Social Security you subtract uses up room under the pension and annuity limit.
Does Colorado tax pensions?
Partly taxed. The pension and annuity subtraction is up to $24,000 per person at 65 and older and $20,000 at 55 to 64. The same limit covers 401(k) and IRA withdrawals, and any Social Security you subtract counts against it. Bills to remove the limits did not pass, so they still apply in 2026. Military retirement pay: under 55, up to $15,000 can be subtracted (2022 to 2028); at 55 and older it falls under the regular pension limit.
Does Colorado tax 401(k) and IRA withdrawals?
Partly taxed. 401(k) and IRA withdrawals fall under the same subtraction as pensions ($24,000 per person at 65 and older, $20,000 at 55 to 64), which is also reduced by any Social Security subtracted.
Is Colorado a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Colorado charges about $625 in state income tax, ranking #33 of 51 (lowest tax first).
Related
Sources: tax.colorado.gov, tax.colorado.gov (2), tax.colorado.gov (3), leg.colorado.gov, leg.colorado.gov (2), tax.colorado.gov (4). Rules reviewed . Some 2026 amounts were not yet published or sources differed; confirm with the state revenue department.