Does Colorado tax pensions and retirement income?
Taxed, with a retirement exclusion
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.
In the state's own words
Copied word for word from the official document linked below each quote:
“The subtraction is generally allowed only to individuals age 55 or older but may also be claimed by individuals under age 55 for pension and annuity income they receive as a death benefit.”
“The subtraction is generally limited to $20,000 each year or, for individuals age 65 or older, $24,000.”
Details worth knowing
- The subtraction can also cover certain IRA distributions. Colorado treats Social Security under its own rules; see the Colorado Social Security page.
And 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. The Colorado Social Security page quotes the rule.
Federal tax still applies
Whatever Colorado does, pensions, annuities and traditional IRA or 401(k) withdrawals are generally taxable on your federal return. See the federal tax brackets and, if you are 73 or older, the required minimum distribution calculator.
State rules change, and the details (age limits, income limits, which plans qualify) 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 12, 2026.