Updated October 7, 2026. Quick answer: Only if you live there. Colorado’s part-year and nonresident schedule counts pension income only if it was “received during that part of the year you were a Colorado resident” and a Colorado resident may subtract up to $24,000 of pension income at age 65 or older.
Federal civil service pensions in Colorado: does Colorado tax federal pensions.
How Colorado treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | The DR 0104PN schedule for part-year and nonresident filers apportions income so that Colorado tax is figured only on Colorado income. Its line 12 sums federal Form 1040 lines 4b, 5b and 6b, and line 13 carries into the Colorado column only the part of that sum received while a Colorado resident, so a pension received after moving away is not counted. The booklet says a nonresident files only if there is income from Colorado sources. This rests on the DR 0104PN schedule and the Who Must File section of the 2025 booklet. |
| Residents with a pension earned elsewhere | A full-year resident starts from federal taxable income, so a pension earned in another state is part of the starting figure. The line 4 pension and annuity subtraction then allows up to $24,000 at age 65 or older and up to $20,000 from age 55 to 64, reduced by any Social Security subtraction claimed on line 3, and only for pension income included in federal taxable income. The source says: “you may subtract $24,000 minus any amount entered on line 3, or the total amount of your taxable pension/annuity income, whichever is smaller; if the amount in line 3 of this form is greater than $24,000, you may not claim any subtraction for pension and annuity income on line 4”. This rests on the line instructions in the resident DR 0104 booklet, not on the part-year schedule. |
| Part-year residents (year of a move) | A part-year resident files the DR 0104 with the DR 0104PN, which lists federal income in one column and Colorado income in another. Pension and annuity income counts for Colorado only for the part of the year spent as a Colorado resident. The source says: “A part-year Colorado resident who received taxable income while residing here”. This rests on the Who Must File section of the booklet and line 13 of the DR 0104PN. |
| Rate | Colorado prints a flat income tax rate of 4.4% for 2025, and the booklet’s tax table is headed with that rate. The source says: “The income tax rate is currently 4.4%.” |
| Return to file | Full-year residents file the DR 0104 or DR 0104EZ. Part-year residents and people who are not Colorado residents but have Colorado source income file the DR 0104 together with the DR 0104PN. The source says: “you must file DR 0104 with DR 0104PN”. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as a Colorado resident, and $20,000 after leaving.
The first $20,000 can be taxed by Colorado; the rest is outside its reach under the federal rule below. At the 4.4% rate printed for 2025, the tax on it is computed as $20,000 x 0.044 = $880, before any exclusion or credit. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means any income from a qualified retirement plan, a simplified employee pension, a 403(a) or 403(b) plan, an individual retirement plan, an eligible 457 plan or a governmental plan. Income from a nonqualified deferred compensation plan counts only if it is part of a “series of substantially equal periodic payments” made for life or for a period of at least 10 years, or is a payment after termination of employment from a plan that exists only to provide benefits above the Internal Revenue Code limits, so not every payment is covered. Retired pay of a member of a uniform service is also covered.
Related: how Colorado taxes retirement income, whether Colorado taxes pensions, Colorado to Arizona retirement taxes, Colorado to Florida retirement taxes, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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Answer againSources
- 2025 Colorado Individual Income Tax Filing Guide, DR 0104 Booklet (Colorado Department of Revenue): https://tax.colorado.gov/sites/tax/files/documents/Book104_2025.pdf
- 2025 DR 0104PN Part-Year Resident/Nonresident Tax Calculation Schedule (Colorado Department of Revenue): https://tax.colorado.gov/sites/tax/files/documents/DR0104PN_2025.pdf
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.