Colorado’s revenue tax charge 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 robotically granted a six-month Colorado state tax extension if in addition they apply for a federal tax extension by tax day.
Taxpayers who request an extension ought to pay no less than 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 charge is 4.4%. Beforehand, Colorado taxed revenue at a hard and fast charge 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 strategy is completely different from how the federal authorities and a number of other different states acquire taxes. As a substitute of taxing chunks of a taxpayer’s revenue at progressively larger charges relying on how a lot they make, the state levies a flat 4.4% on taxable revenue.
Colorado typically 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 customary deduction?
Not like another states, Colorado doesn’t have a state customary deduction. It is because a taxpayer’s federal taxable revenue — which already takes into consideration the applying of the federal customary deduction or the taxpayer’s itemized deductions — is mostly used as a foundation for calculating taxes owed to Colorado.
Single and joint filers who make over a certain quantity of revenue, nonetheless, may additionally be requested so as to add again in a portion of their federal itemized deductions when figuring their Colorado taxable revenue. See the Individual Income Tax Guide on the Colorado Division of Income’s web site for extra info.
Do I’ve to pay Colorado state revenue tax?
Colorado residents and part-year residents who file a federal tax return sometimes additionally must file a Colorado state revenue tax return. Nonresidents who earn Colorado-sourced revenue may additionally 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 obtained whereas a resident, plus revenue from Colorado sources whereas a nonresident.
Earnings from Colorado sources.
Am I a resident for Colorado revenue tax functions?
There are three sorts of residency statuses in terms of Colorado state tax. They decide what portion of your revenue the state will tax.
Resident standing guidelines
Colorado typically considers you a resident for tax functions if:
You’ve got a everlasting dwelling in Colorado to which you come back after touring from the state. This dwelling might be a rental, rental, home or cell dwelling; or
You keep a everlasting dwelling in Colorado and spend greater than six months (182 days) of the yr within the state.
College students who attend school in a state outdoors Colorado, don’t intend to ascertain residency in that state post-graduation or are supported by mother and father who reside in Colorado whereas in class are thought-about 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 school.
Particular guidelines might apply to navy 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 website has the main points.
Half-year resident standing guidelines
Should you lived in Colorado when the yr began however then moved to a different state, it’s possible you’ll be thought-about a part-year resident for Colorado tax functions. Likewise, in the event 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 most likely thought-about a part-year resident.
Nonresident standing guidelines
Colorado defines nonresidents as individuals who don’t reside in Colorado however might have briefly labored in Colorado or made revenue from Colorado-based sources.
Should you’re a nonresident with taxable Colorado revenue, you might have a state submitting obligation in the event you additionally should file a federal return. Nonresidents file Form DR 0104 and use Form 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 objects such because the sale of ready meals and drinks, items or merchandise, and resort leases or different lodging. It doesn’t apply to issues comparable to groceries or drugs, that are tax-exempt.
Counties and cities can even levy an area gross sales tax on prime of the state one, bringing the entire gross sales tax as much as 11.2% in some areas. In line with the Tax Basis, the common native tax charges throughout the state hover round 4.88%, making Colorado one among 5 states with the best native common gross sales tax within the nation.
5 issues to learn about Colorado revenue tax
Tax software program will do your state taxes, although generally for an additional payment. You may as well examine whether or not you qualify for an IRS Free File program that covers Colorado state tax.
Colorado provides a number of refundable and nonrefundable tax credit modeled after federal incentives, together with a state-specific youngster tax credit score, an earned revenue tax credit score and a residential power credit score.
Should you can’t afford your tax invoice, Colorado provides payment plans that you would be able to arrange on-line or over the telephone.