Colorado retirement taxes in 2026: what retirees pay

Colorado taxes income at a single flat rate, so what you owe in retirement mostly comes down to how much of your income falls outside the state's retirement exclusion. Each person can set aside a portion of pension, annuity and other retirement income, and the cap is higher once you reach the older age bracket than in the years leading up to it. Social Security is taxed here, but the taxable portion goes inside that same exclusion rather than getting a separate break. Because of that, couples and early retirees can end up in quite different spots.

Colorado retirement taxes at a glance (2026)

Colorado's income tax rate for 2026

Colorado taxes income at a flat 4.4% 1.

How Colorado treats retirement income

Each person 65 or older may exclude up to $24,000 of retirement income. From 55 to 64, the limit is $20,000. Taxable Social Security counts toward the same limit. 4

What three retirees would pay in Colorado

These are estimates from Monte Climb's planner on 2026 law, for three example households. They start, as the app does, from federal taxable income: the 2026 standard deduction plus the extra amount at 65 5, the taxable part of Social Security 6 and the senior deduction 7. Those federal deductions are already taken off, and most states allow less of their own, so Colorado's real bill can be higher than shown.

• A single retiree, 67 with $54,000 of income would owe about $0 to Colorado, after $24,000 of retirement income is excluded.
• A married couple, both 67 with $106,000 of income would owe about $185 to Colorado, after $48,000 of retirement income is excluded.
• A married couple, both 62, before Social Security with $76,000 of income would owe about $167 to Colorado, after $40,000 of retirement income is excluded.

The same couple next door

The married couple, both 67, with $106,000 of income, in Colorado and the states around it:

Every figure here starts from federal taxable income, as above, so a state whose own deductions are smaller can tax more than shown.

What these estimates leave out

• Colorado's own standard deduction, exemptions and credits: the estimate starts from federal taxable income instead, which takes off the larger federal deductions.
• City income taxes, and capital gains rules a state applies apart from its rate.
• Rules for military and public-employee pensions that some states treat separately.

What this means for your plan

In Colorado, the key question is how your Social Security and other retirement income together compare with each person's exclusion cap. If that combined total fits under the limit, the flat rate may apply to very little. If Social Security uses up most of the cap, more of your pension or withdrawals is taxed. When each spouse reaches the older bracket, and when benefits begin, both affect where you land. Monte Climb applies these Colorado rules to your own income and ages year by year, so you can see how the exclusion plays out in your plan.

Sources

1. Colorado income tax for 2026 (Monte Climb's audit grades it high)
2. Colorado: a further official source for the 2026 tables
3. Colorado: a further official source for the 2026 tables
4. Colorado's retirement-income rule: C.R.S. §39-22-104(4)(f)
5. Rev. Proc. 2025-32 §4.14(1) and §4.14(3): the 2026 standard deduction and the additional amount at 65
6. IRC §86 and IRS Publication 915: how much of Social Security is taxable (thresholds set by statute, not indexed)
7. P.L. 119-21 (One Big Beautiful Bill Act) §70103: the $6,000 deduction for each person 65 or older, 2025–2028

Figures computed by code from Monte Climb's 2026 state tables (snapshot f024e17). An illustration, not tax advice.

Frequently asked questions

Does Colorado tax Social Security?

In 2026, Social Security is taxed, but counted inside Colorado's retirement exclusion in Colorado.

What is Colorado's income tax rate in 2026?

Colorado has a flat 4.4% for 2026.

How much state tax would a retired couple pay in Colorado?

A married couple, both 67, with $106,000 of Social Security, pension and IRA income would owe about $185 to Colorado in 2026, by Monte Climb's estimate.