What Is the Colorado Requirement for Filing State Income Tax?

Colorado is one of 41 states that tax income. If you live or work in Colorado, and make enough money that you must file a federal income tax return, then you must also pay Colorado state income tax. You can file your return electronically or by mail. If you work for a Colorado company as an employee, state income tax should be automatically withheld from your paycheck.

Colorado assesses income tax at a rate of 4.63 percent, as of 2010. This is a flat tax, meaning persons at all income levels and classifications pay the same tax rate.

If you reside in Colorado full time and have income, you must pay state income tax. If you live in Colorado only part time, but earn income during the time you are in Colorado, you must pay state income tax. For instance, if you spend three months every summer in Colorado, and during that time you work at a job, you owe state income tax on the money you earned while you were in Colorado. Finally, if you live in another state but you have income from a source in Colorado, such as investment property in Colorado, you owe Colorado state income tax.

Colorado is home to several large military bases. If you reside in Colorado and have been sent overseas as part of your military service, Colorado is still considered your legal residence and you should file as a Colorado resident. If you're stationed at a Colorado military base, you don't have to pay income tax on your military income, but if you have any other income, such as from investments, or a working spouse, you will need to pay state tax on that income.

Colorado allows several deductions that can reduce your tax bill. For instance, you can deduct any interest you earned from government bonds from your taxable income. If you collect from a pension or annuity, you're allowed to deduct all or part of this from your taxable income, depending on your age. Charitable contributions and contributions to a qualifying tuition savings program can also reduce your taxable income. You should consult your income tax form or a tax professional for a list of all deductions.