Colorado State Income Tax: Rates and Who Pays in 2022-2023

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Colorado’s revenue tax price is 4.4%. It’s one among 11 states with a flat revenue tax.

Colorado state revenue tax returns are due April 18, 2023. Individuals who want extra time to file are routinely granted a six-month Colorado state tax extension if additionally they apply for a federal tax extension by tax day.

Taxpayers who request an extension ought to pay at the least 90% of their tax invoice to keep away from incurring penalties and extra curiosity.

Colorado state revenue tax charges and tax brackets

For tax yr 2022 (taxes filed in 2023), Colorado’s state revenue tax price is 4.4%. Beforehand, Colorado taxed revenue at a set price of 4.55%, however the passage of Proposition 121 lowered the speed by 0.15% for tax years 2022 and ahead.

Colorado’s flat-tax method is totally different from how the federal authorities and several other different states acquire taxes. As a substitute of taxing chunks of a taxpayer’s revenue at progressively increased charges relying on how a lot they make, the state levies a flat 4.4% on taxable revenue.

Colorado usually makes use of a taxpayer’s federal taxable revenue as a place to begin for calculating Colorado taxable revenue. Nevertheless, sure state-specific tax credit in addition to Colorado’s guidelines for additions and subtractions to revenue can have an effect on tax legal responsibility.

What’s Colorado’s commonplace deduction?

In contrast to another states, Colorado doesn’t have a state commonplace deduction. It is because a taxpayer’s federal taxable revenue — which already takes into consideration the applying of the federal commonplace deduction or the taxpayer’s itemized deductions — is usually used as a foundation for calculating taxes owed to Colorado.

Single and joint filers who make over a specific amount of revenue, nevertheless, can also be requested so as to add again in a portion of their federal itemized deductions when figuring their Colorado taxable revenue. See the Particular person Revenue Tax Information on the Colorado Division of Income’s web site for extra data.

Do I’ve to pay Colorado state revenue tax?

Colorado residents and part-year residents who file a federal tax return usually additionally have to file a Colorado state revenue tax return. Nonresidents who earn Colorado-sourced revenue can also have a submitting obligation.

In case your Colorado residency sort is …

Colorado taxes this a part of your revenue

All revenue from all sources inside and out of doors Colorado.

All revenue acquired whereas a resident, plus revenue from Colorado sources whereas a nonresident.

Revenue from Colorado sources.

Am I a resident for Colorado revenue tax functions?

There are three kinds of residency statuses in relation to Colorado state tax. They decide what portion of your revenue the state will tax.

Resident standing guidelines

Colorado usually considers you a resident for tax functions if:

  • You may have a everlasting house in Colorado to which you come back after touring from the state. This house could possibly be a rental, rental, home or cell house; or

  • You preserve a everlasting house in Colorado and spend greater than six months (182 days) of the yr within the state.

College students who attend faculty in a state outdoors Colorado, don’t intend to ascertain residency in that state post-graduation or are supported by mother and father who dwell in Colorado whereas at school are thought of residents of Colorado by the state taxing authority — no matter whether or not they voted or utilized for a driver’s license or ID within the state the place they attend faculty.

Particular guidelines could apply to army personnel or service members and to those that file collectively with somebody who’s a resident of Colorado, even when they themselves are usually not. The Colorado Division of Income’s web site has the main points.

Half-year resident standing guidelines

For those who lived in Colorado when the yr began however then moved to a different state, you could be thought of a part-year resident for Colorado tax functions. Likewise, should you lived in one other state when the calendar yr began however then moved to Colorado and took steps to ascertain residency, you’re additionally in all probability thought of a part-year resident.

Nonresident standing guidelines

Colorado defines nonresidents as individuals who don’t dwell in Colorado however could have briefly labored in Colorado or made revenue from Colorado-based sources.

For those who’re a nonresident with taxable Colorado revenue, you could have a state submitting obligation should you additionally should file a federal return. Nonresidents file Kind DR 0104 and use Kind 0104PN to assist calculate Colorado tax legal responsibility.

Colorado gross sales tax

Colorado’s statewide gross sales tax is 2.9%. This tax applies to gadgets such because the sale of ready meals and drinks, items or merchandise, and resort leases or different lodging. It doesn’t apply to issues reminiscent of groceries or drugs, that are tax-exempt.

Counties and cities may also levy a neighborhood gross sales tax on high of the state one, bringing the entire gross sales tax as much as 11.2% in some areas

5 issues to find out about Colorado revenue tax

  1. Tax software program will do your state taxes, although typically for an additional price. You may as well examine whether or not you qualify for an IRS Free File program that covers Colorado state tax.

  2. Colorado provides a number of refundable and nonrefundable tax credit modeled after federal incentives, together with a state-specific baby tax credit score, an earned revenue tax credit score and a residential vitality credit score.

  3. For those who can’t afford your tax invoice, Colorado provides fee plans you can arrange on-line or over the cellphone.

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