Updated October 29, 2026. Quick answer: Partly, through the general subtraction. The 2025 booklet prints no rule that names federal pensions; “you may subtract $24,000 minus any amount entered on line 3” at 65 or older, with a $20,000 limit for ages 55 to 64.
What Colorado does with a FERS or CSRS annuity
| Question | What the Colorado documents say |
|---|---|
| What the source says | The state documents cited here do not name federal civil service pensions (CSRS or FERS) at all; a federal pension included in federal taxable income falls under the general pension and annuity subtraction, which is limited by age, with no separate federal exemption printed. |
| Amount or limit | Age 65 or older: up to $24,000 minus any Social Security subtraction claimed on line 3, or the taxable pension and annuity income, whichever is smaller. Age 55 to 64: up to $20,000 on the same terms. Under 55: only a secondary beneficiary (such as a widow or dependent child) may subtract up to $20,000. |
| Age or other test | Age on December 31, 2025: 65 or older, at least 55 but not yet 65, or younger than 55 only as a secondary beneficiary of the person who earned the pension. |
| State rate printed | The 2025 booklet states the income tax rate is currently 4.4%. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the Colorado documents’ own words
- “subtract the income you earned from a pension or annuity” (2025 Colorado Individual Income Tax Booklet (DR 0104 instructions, DR 0104AD line 4))
- “pension or annuity income that is included in your federal” (2025 Colorado Individual Income Tax Booklet (DR 0104 instructions, DR 0104AD line 4))
- “At least 55 years old, but not yet 65” (2025 Colorado Individual Income Tax Booklet (DR 0104 instructions, DR 0104AD line 4))
- “The income tax rate is currently 4.4%” (2025 Colorado Individual Income Tax Booklet (DR 0104 instructions, DR 0104AD line 4))
- “subtract some or all of the social security, pension, and annuity income” (Individual Income Tax Guide (revised January 2026))
How this differs from other pensions in Colorado
The sources print one age-based pension and annuity subtraction and do not carve out federal pensions, so a federal annuity appears to be treated the same as a private pension for this subtraction. Separate subtractions are printed for military retirement and railroad retirement, but not for federal civil service retirement. See also Does Colorado tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The state documents cited here do not address TSP withdrawals, though the DR 0104AD line 4 caption lists IRA income alongside pension and annuity income. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
What the Colorado documents leave open
None of the Colorado documents cited here mentions CSRS, FERS or federal civil service pensions by name, so the treatment is inferred from the general subtraction. The Department’s Income Tax Topics publication and the statute text were not read, and the documents do not address TSP withdrawals.
Common mistakes
- Expecting a federal exemption. The printed subtractions carve out military and railroad retirement, not civil service retirement.
- Forgetting that the cap is reduced by any Social Security subtraction claimed on line 3.
Related: Does Colorado tax pensions?, Colorado military retirement pay, Colorado retirement deduction line by line, and FERS, TSP and Social Security sequencing.
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Answer againSources
- 2025 Colorado Individual Income Tax Booklet (DR 0104 instructions, DR 0104AD line 4): https://tax.colorado.gov/sites/default/files/documents/Book104_2025.pdf
- 2025 DR 0104AD Subtractions from Income Schedule: https://tax.colorado.gov/sites/tax/files/documents/DR0104AD_2025.pdf
- Individual Income Tax Guide (revised January 2026): https://tax.colorado.gov/sites/default/files/documents/Individual_Income_Tax_Guide_January_2026.pdf
Read from the state documents linked above on October 29, 2026. General information, not tax advice.