Does Colorado tax military retirement pay?
Partly taxed
Partly. Under 55, Colorado lets a retired servicemember subtract military retirement benefits up to $15,000 a year (2022 through 2028). At 55 or older, military retirement goes under the regular pension subtraction instead, which has its own limits.
In the state's own words
Copied word for word from the official document linked below each quote:
“A retired servicemember may be able to claim a subtraction for all or part of the military retirement benefits that are included in their federal taxable income.”
“2022-2028 $15,000”
“If a retired servicemember is at least 55 years old at the end of the tax year, they may claim the regular pension and annuity subtraction on the applicable line of the Subtractions from Income Schedule (DR 0104AD) for military retirement benefits included in their federal taxable income.”
Details worth knowing
- The regular pension and annuity subtraction is generally limited to $20,000 a year, or $24,000 at 65 or older (see the Colorado pension page).
Other retirement income in Colorado
Partly. From age 55, Colorado lets you subtract pension and annuity income up to $20,000 a year, or $24,000 at 65 or older. Military retirement and railroad benefits have their own subtractions. The Colorado pension page has the details, and the Colorado Social Security page covers Social Security. Partly. If you are 65 or older, Colorado lets you subtract all of the Social Security that is taxed on your federal return. From age 55 to 64, you can subtract all of it if your adjusted gross income is no more than $75,000 (single) or $95,000 (joint); above that, the subtraction is capped at $20,000.
Before you file or move
This page is about state income tax only. Your federal return has its own rules for military retired pay, and VA disability compensation is a separate benefit from retired pay. State rules change, and the details (age, years, which kinds of pay qualify, survivor benefits) matter. Check with the Colorado Department of Revenue before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- Income Tax Topics: Social Security, Pensions, and Annuities (revised January 2025)Colorado Department of Revenue. Read on November 13, 2026.