Colorado State Income Tax Withholding
Last Updated: January 2026
Overview
Colorado uses a flat income tax rate applied to all taxable income. The state has been gradually reducing its tax rate and may continue to do so based on revenue triggers.
2026 Tax Rates
| Tax Type | Rate |
|---|---|
| Flat Tax Rate | 4.40% |
Note: The rate may reduce to 4.25% if state revenue triggers are met. Check with the Colorado Department of Revenue for current rates.
Deductions and Exemptions
Colorado uses federal taxable income as the starting point for state tax calculations. The state allows the federal standard deduction.
| Deduction Type | Amount |
|---|---|
| Standard Deduction | Federal amount applies |
Special Considerations
State W-4 Form
Colorado accepts either the Form DR 0004 (Colorado Employee Withholding Certificate) or the federal Form W-4. If an employee submits only a federal W-4, Colorado withholding is calculated based on that form.
Colorado Taxable Income
Colorado taxable income equals federal taxable income with certain Colorado-specific additions and subtractions. Most wage earners will find their Colorado taxable income closely matches their federal amount.
No Local Income Taxes
Colorado does not have local income taxes. The state rate applies uniformly across all jurisdictions.
Paid Family and Medical Leave Insurance (FAMLI)
Colorado requires FAMLI premium withholding:
| FAMLI Component | 2026 Rate |
|---|---|
| Total Premium | 0.9% of wages |
| Employee Share | 0.45% |
| Employer Share | 0.45% |
Employers with fewer than 10 employees are exempt from the employer share.