Income Taxes in Colorado
Colorado's income tax is a flat 4.40% -- but it is genuinely not a fixed number the way a simple flat-tax state's rate is: a TABOR-driven mechanism can temporarily reduce it in years the state certifies a qualifying revenue surplus, a real, year-to-year variable worth understanding before you budget.
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Learn moreThe base rate: a flat 4.40% on taxable income
Colorado has taxed individual income at a single flat rate since a permanent reduction to 4.40% took effect for tax year 2022 (down from 4.63%). That 4.40% rate is confirmed for tax year 2025 and, per multiple 2026 tax-guide sources, tax year 2026 as the statutory default -- but see the TABOR mechanism below for why it is not fully fixed.
TABOR can temporarily lower the rate further -- a genuinely live variable
Under TABOR (the Taxpayer's Bill of Rights), when the state collects revenue above its constitutional cap in a given fiscal year, one refund mechanism is a temporary across-the-board reduction in the income tax rate for that tax year. This mechanism reduced the rate to 4.25% for tax year 2024; it did not trigger for tax year 2025, so the rate reverted to 4.40%. The legislature extended this mechanism through tax year 2035, so whether tax year 2026's rate will be 4.40% or lower depends on a state revenue determination not finalized until after the fiscal year closes -- a real, disclosed uncertainty rather than a settled number.
How Colorado's rate compares to other flat-tax states in this dataset
Colorado's 4.40% flat rate is a middle-of-the-pack figure among the flat-tax states built so far in this project, sitting between North Carolina's 3.99% and Georgia's 4.99% -- genuinely not a low-tax outlier the way a no-income-tax state would be, but not a high-tax outlier either.
What this means for budgeting a Colorado move
Budget using the current 4.40% flat rate as your baseline, but understand it could be temporarily lower in a given tax year depending on the state's certified revenue surplus -- check the Colorado Department of Revenue's current-year guidance directly (tax.colorado.gov) rather than assuming a single fixed number applies indefinitely.
Key takeaways
- Colorado's flat income tax rate is 4.40% for tax years 2025 and 2026 as the statutory default -- a middle-of-the-pack rate among this dataset's flat-tax states.
- A TABOR-driven refund mechanism can temporarily lower the rate in years the state certifies a qualifying revenue surplus -- it reduced the rate to 4.25% for tax year 2024 specifically.
- This mechanism is extended through tax year 2035, making Colorado's income tax rate a genuinely live, year-to-year variable rather than a fixed number -- confirm the current year's rate with the Colorado Dept. of Revenue directly.
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