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Colorado Retirement Taxes Retirees can deduct between $20,000 and $24,000 in retirement income from state taxes in Colorado, depending on their age. Taking that deduction into account, income from sources such as Social Security or pensions may be mostly or entirely state-tax-free for many Colorado retirees.
Most Tax-Friendly States for Retirement Wyoming. Nevada. Florida. South Dakota. Iowa. Pennsylvania. Alaska. Texas.
Colorado residents can get an extra 50% of whatever amount of money they receive from the federal Earned Income Tax Credit (EITC) for the 2023 tax year only (taxes filed in 2024). For example, if you got $600 in federal EITC money, you would get an extra $300 in COEITC.
But, rest assured, youre not alone in making the choice to retire in Colorado, as its 65+ population is the states fastest-growing segment. In fact, over the past decade, the senior population has grown by 317,000 and now stands at more than 800,000 people.
DR 0104 - Individual Income Tax Return (form only)
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The entirety of a resident individuals income is subject to Colorado income tax, regardless of whether the income was derived from sources inside or outside of Colorado.