Colorado: A Permanent Home Plus Six Months and You Are a Resident
The three grounds on which Colorado treats a person as a resident, plus the local tax on the privilege of working and the TABOR refund.
Colorado: A Permanent Home Plus Six Months and You Are a Resident
Colorado is one of the states that remote workers and families from the expensive coastal states have been moving to in numbers. The residency rules here are gentler than New York's, but they come with traps of their own.
Three ways to become a resident
The state treats you as a resident if any one of three conditions is met:
The third one is where people trip. You may have no domicile here and no intention of moving, but if you keep an apartment and spent more than half the year in it, the state counts you as a resident — on your worldwide income.
A part-year resident is someone who moved into Colorado or out of it during the year.
A nonresident is someone who at no point in the year considered Colorado home, even if they lived and worked there temporarily.
Who has to file
You file a Colorado return if you are required to file a federal return or you owe state tax for the current year, and you are:
The tax on the privilege of working
Colorado has no city income tax in the usual sense, but several cities charge an occupational privilege tax — a flat monthly amount per employee whose earnings exceed a threshold. Technically it is not an income tax, and it does not appear on the state return.
| City | Per employee per month | Earnings threshold |
|---|---|---|
| Denver | $5.75 | over $500 a month |
| Glendale | $5.00 | over $750 |
| Sheridan | $3.00 | threshold set by city code |
| Greenwood Village | $2.00 | over $250 |
| Aurora | repealed as of January 1, 2025 | — |
The amounts are small, but they come out automatically, and the employer pays a second share on top: in Denver that is another $4.00 for each covered employee. In Glendale the same $5.00 is also due for every owner, partner or proprietor of the business.
The amounts did not change for 2026. Aurora's repeal, effective 2025, remains in force.
What is new for 2025
TABOR: the refund you do not want to miss
Colorado's constitution limits how fast state revenue may grow (the Taxpayer's Bill of Rights). When the state collects more than it is allowed to keep, the surplus goes back to residents — including as a refund of part of the sales tax, claimed on the return.
The practical point is simple: to get the refund you have to file a state return, even if no tax is due. People with small incomes sometimes skip filing — and lose the money.
What to do
Sources
Residency rules, rates and forms (DR 0104, 104PN) are at tax.colorado.gov. For local taxes, see the websites of the individual cities.
Moving to Colorado, or already living across two states? Book a consultation — we will work out where you are a resident and what you need to file.
