Updated September 5, 2026. Quick answer: Colorado does not exempt any pension category outright; nearly all retirement income, public and private pensions, federal civil service pensions, and IRA/401(k) distributions, is federally taxable first and then draws on one shared age-based subtraction capped at $20,000 for filers 55 to 64 and $24,000 for filers 65 and older (each cap is raised to the amount of Social Security benefits included in federal taxable income when that is larger, and for ages 55 to 64 only at or below an AGI limit), while military retirees under 55 instead use a separate subtraction capped at $15,000.
Federal civil service pensions in Colorado: does Colorado tax federal pensions.
State retirement-income forms, line by line: Colorado DR 0104AD.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Colorado tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Colorado tax 403(b) and 457(b) withdrawals.
The Colorado Fire & Police Pension Association options, DROP and refund rules, from the Association’s own documents: Colorado FPPA retirement decisions.
Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is Colorado a community property state?.
Selling your home? How the state taxes the profit, from its own tax documents: Does Colorado tax the profit from selling your home?.
A pension earned in another state, or paid after a move, is covered here: does Colorado tax out-of-state pensions.
The Denver Employees Retirement Plan survivor and refund rules, from the plan’s own handbook: Denver DERP retirement decisions.
Trusts have their own page: does Colorado tax trust income.
Dividends and interest have their own page: does Colorado tax dividends and interest.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Colorado have an inheritance tax?.
Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does Colorado have a gift tax?.
Annuity payments have their own page: does Colorado tax annuity income.
Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does Colorado have an estate tax?.
Military retired pay has its own page: does Colorado tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: Colorado 529 plan tax deduction.
Selling stocks, funds or real estate has its own page: does Colorado tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: does Colorado tax 401(k) and IRA withdrawals.
The state’s income tax schedule: the Colorado 2026 income tax rate (pending).
Confidence note: medium. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Colorado taxes retirement income generally.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Public pensions are federal taxable income first, then may be offset by Colorado’s pension and annuity subtraction under 39-22-104(4)(f), C.R.S., capped at $20,000 for taxpayers age 55 to 64 and $24,000 for taxpayers 65 and older. The regulation text (as mirrored by Cornell Law School’s Legal Information Institute, fetched this session) does not give government pensions any larger or separate allowance. |
|---|---|
| Private (employer) pensions | Private employer pensions receive identical treatment to public pensions under the same $20,000 (ages 55-64) or $24,000 (age 65+) subtraction, provided the benefit is paid periodically based on prior personal service or an employer-employee relationship. |
| Federal government pensions (FERS/CSRS) | Federal civil service pensions (FERS/CSRS) qualify for the same age-based pension and annuity subtraction as other pensions; the regulation does not describe a distinct rule for federal civilian retirement income. |
| Military retirement pay | Colorado allows a separate military retirement benefits subtraction of up to $15,000 for retired servicemembers under age 55 under 39-22-104(4)(y), C.R.S.; servicemembers 55 or older instead use the regular pension and annuity subtraction. This figure and the under-55 test are read directly in 39-22-104(4)(y), C.R.S. (2024 edition: $15,000 for income tax years beginning on or after January 1, 2022 and before January 1, 2029), and the 2025 DR 0104AD Subtractions from Income Schedule has a separate line for military retirement benefits under age 55. Colorado’s tax.colorado.gov guidance pages still returned access errors this session. |
| IRA and 401(k)/403(b) distributions | IRA distributions, distributions from self-employed retirement accounts, and matured privately purchased annuities qualify for the same age-based pension and annuity subtraction as pensions. Premature IRA or self-employed-plan distributions subject to the federal 10 percent penalty do not qualify, but premature distributions from a traditional employer-sponsored 401(k) can still qualify; Roth IRA distributions are excluded from the calculation entirely because they are not federally taxable. |
| General retirement-income exclusion | There is no separate general retirement-income exclusion beyond the pension and annuity subtraction described above; Social Security benefits are folded into related subtraction rules rather than taxed on their own, with the pension and annuity subtraction cap raised to the full amount of Social Security benefits included in federal taxable income for filers 65 and older since tax year 2022, and for filers 55 to 64 whose AGI is $75,000 or less (single) or $95,000 or less (joint) starting tax year 2025, per 39-22-104(4)(f)(III), C.R.S. (2024 edition). |
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Source: WiserAdvisor’s service descriptionSocial Security
Colorado folds Social Security into its retirement-income subtraction rather than taxing it as a separate category, with a full exemption reported for most older filers; see the sibling Social Security page for exact age and income rules. Social Security has its own rules in every state; see the full breakdown in how Colorado taxes retirement income generally.
Figures verified against 39-22-104(4)(f) and (4)(y), C.R.S. (2024 edition), the Colorado rule 39-22-104(4)(f) as mirrored by Cornell LII, the 2025 DR 0104AD schedule and Colorado Legislative Council Staff 2023-TE2 on September 30, 2026; 2025 and 2026 session amendments to those subsections and the tax.colorado.gov guidance pages were not re-checked.
Statute and sources
Governing citation: 39-22-104(4)(f), C.R.S. (pension and annuity subtraction); 39-22-104(4)(y), C.R.S. (military retirement benefits subtraction).
- Cornell Law School LII, Code of Colorado Regulations, Rule 39-22-104(4)(f), Pension and Annuity Subtraction
- Colorado Legislative Council Staff, Tax Expenditure Evaluation: Military Retirement Benefits Deduction (2023-TE2, January 2023)
Read September 5, 2026.
Related: how Colorado taxes retirement income generally · does Colorado tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.