Does Colorado tax Social Security? Retirement income rules
Colorado is fairly tax-friendly for retirees. On a typical retirement income it ranks #33 of 51 for the lowest state income tax.
Assumptions behind this comparison
The ranking uses a full-year resident, single filer age 67, with $30,000 Social Security, $20,000 private defined-benefit pension, $20,000 traditional IRA withdrawals under 2026 rules. It models a general private pension and traditional IRA withdrawals. Public or military pension exceptions, early-distribution penalties and itemized deductions require separate checking. Maryland and Indiana estimates include an approximate statewide-average county income tax; other local income taxes are not modeled. A state with no income tax differs from a state that exempts only specified retirement income.
The joint table uses two spouses age 67, with each income category split equally between them. Personal exclusions follow each spouse's own eligible income; some states instead allow a joint cap. The calculator initially assigns household income to you and lets you enter your spouse's actual age and share. Read the source instructions for your pension type.
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, qualifying employer-plan withdrawals can receive the pension exclusion while traditional IRA withdrawals do not. Keep each account in its own field when changing state; the calculator applies the state-specific treatment.
The employer-plan field supports federally taxable private 401(k) / 403(b) retirement distributions owned by someone aged 60 or older. Earlier distributions and Hawaii, Mississippi or Pennsylvania employer-plan scenarios are not calculated; funding or plan retirement eligibility needs a separate check. Enter each amount once; do not include completed rollovers, Roth payments or special public/military plans.
Older shared links did not identify employer-plan withdrawals separately. Pension and IRA amounts have been left unchanged. If an old amount includes 401(k) or 403(b) withdrawals, move that portion into the employer-plan field before comparing states; the tool cannot infer the original account type.
Household totals include taxable private pensions and traditional retirement withdrawals. Other ordinary income means taxable interest and ordinary dividends; capital gains, qualified dividends, tax-exempt interest, wages, Roth distributions and special public or military pension rules need a separate calculation. Disability and survivor eligibility are not assessed by this tool. Age bands represent the listed ages for the full year; midyear eligibility and birth-date exceptions need checking.
Local income taxes are not modeled here, except the approximate statewide-average county rates included when you select Maryland or Indiana.
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 traditional IRA withdrawals | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 private defined-benefit pension, $20,000 traditional IRA withdrawals | $625 | $0 | $4,336 |
| $40,000 Social Security, $40,000 private defined-benefit pension, $50,000 traditional IRA withdrawals, $10,000 other income | $3,493 | $1,694 | $19,812 |
Age 67, 2026 rules including the federal senior deduction. For the joint column, income is the household total, both spouses are 67, and each owns 50% of every income category. State estimates apply Colorado's main exclusions and may differ for income-tested credits.
Lower-tax states for the age-67 example
The amounts below use the fixed example above. Comparison links carry the last valid household entered in the calculator, including each spouse's income and age; the destination recalculates that household. Finish correcting invalid entries before using a comparison.
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 private defined-benefit pension, $20,000 traditional IRA withdrawals, 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.